Learn if Sallie Mae's 8 Private Student Loan Types Are Right For You, Plus How to Ask For Deferment & Forbearance.
SLM Corp., also known as Sallie Mae, was the US’s largest originator of federal student loans until 2010 when the Dept. of Education started originating federal student loans itself. Sallie Mae now services federal student loans on behalf of the Dept. of Education, and originates private student loans. Sallie Mae employs 8,000 people, and manages more than $180 billion in debt for more than 10 million student loan borrowers. The company was originally created in 1972 as a government-sponsored enterprise (GSE) and privatized its operations in 2004. Sallie Mae also originates and services private student loans.
As this was written in late 2011, Sallie Mae offers eight private student loans:
|Loan Name||Intended Borrower & Purpose||Amount Available||Fees||Rate & Term|
|Smart Option Student Loan||Must attend degree-granting eligible school and be enrolled in eligible program.1||Up to 100% of school-certified education costs.||None||10 years. LIBOR + 2.00% (2.25% APR) to LIBOR + 9.88% (9.37% APR)1|
|Career Training Smart Option Student Loan||Non-degree-granting institution with a planned term for enrollment of approximately one academic year.||Up to 100% of school-certified education costs.||Up to 5%||9 years. LIBOR + 7.75% (APR 8.00%) to LIBOR + 12.50% (13.76% APR)|
|Medical Residency & Relocation Loan||Enrolled in final year of study at an allopathic or osteopathic school of medicine and expect to be awarded M.D. or D.O. degree during the same academic year of application.||$1,000 up to $15,000||None||LIBOR + 3.00% (3.21% APR) to LIBOR + 11.88% (11.57% APR)|
|Dental Residency & Relocation Loan||Expect to be awarded D.D.S. degree during the same academic year of application.||$1,000 up to $15,000||None||LIBOR + 3.00% (3.21% APR) to LIBOR + 11.88% (11.57% APR)|
|Global Health Residency & Relocation Loan||Enrolled in final year of study at an allopathic or osteopathic school of medicine and expect to be awarded M.D. or D.O. degree during the same academic year of application.||$1,000 up to $15,000||None||LIBOR + 3.00% (3.21% APR) to LIBOR + 11.88% (11.57% APR)|
|Bar Study Loan||Enrolled in final year at an ABA-accredited law school, or graduated within last 12 months, and sitting for the bar exam no later than 12 months after graduation.||$1,000 up to $15,000||0.00% or 5.00%||15 years. LIBOR + 5.00% (5.24% APR) to LIBOR + 13.00% (14.01% APR)|
|K-12 Family Education Loan||Student enrolled of an eligible K-12 school.||100% the cost of a child's education.||0.00% or 3.00%||3 years. LIBOR + 7.00% (7.25% APR) to LIBOR + 11.50% (13.82% APR)|
|Tutorial Financing Loan||Student enrolled at an eligible tutoring and learning center.||Variable.||0.00% to 5.00%||Variable term. LIBOR + 7.00% (7.25% APR) to LIBOR + 13.50% (APR 15.30%)|
|1Loans available at a higher rate for non-degree schools.|
Sallie Mae and Student Loan Collections
If you cannot afford to repay your Sallie Mae student loan, you have options to avoid default (non-payment). Before reading any further, learn if your loan is federally insured (the US government is guaranteeing repayment of the loan), or private. If your loan is FFEL, Perkins, or Direct, it is federal. If the Sallie Mae loan is federally insured, Sallie Mae must follow federal rules for student loan collections. See the Bills.com resource Default on Federal Student Loan to learn more about your rights, options, and liabilities as the borrower of a federal student loan.
If you cannot afford your Sallie Mae student loan payments and your situation is temporary, login to your Sallie Mae account, select the Postpone Payments section, and request a deferment. Some Sallie Mae loans also allow forbearance. If your income is reduced, Sallie Mae will also negotiate a reduced monthly payment. The Sallie Mae Postponing payments page outlines these options.
If the Sallie Mae loan is private, then Sallie Mae will follow the borrower’s state laws and the rules in the loan contract the borrower signed. Private student loans are similar to unsecured debt. If the borrower defaults on a private student loan, the creditor or collection agency must sue in civil court to collect. If it wins a judgment, the creditor or collection agency can garnish wages, place a lien against property, or a levy financial accounts. The only thing that separates a private student loan from other unsecured debt, such as credit card debt, is that private student loans are not dischargeable in a bankruptcy filing, generally speaking.
Student Loan Consolidation
A student loan consolidation may help by increasing the term length, thereby lowering the monthly payment. There are basically two types of consolidation loans — unsecured and secured. To learn more about unsecured student loan consolidation, see the Bills.com Student Loan Consolidation page.
If you are a homeowner with equity in your home, a debt consolidation loan secured on your home may also be an option, though you should be careful before you borrow money against your home to pay off these Sallie Mae loans. You would be converting what was previously unsecured debt into secured debt. This could cause problems in the future if you are unable to make your mortgage payments. To explore this alternative, you can apply with Bills.com’s network of providers by applying at the Bills.com mortgage refinance form.