Sallie Mae is a student loan company that started as a government sponsored enterprise in 1972 under the name "The Student Loan Marketing Association" with "Sallie Mae" as a nickname. Sallie Mae focuses on offering private education loans for undergraduate, graduate, and professional students. They also strive to offer various banking products as well as college savings opportunities.
- Undergraduate Smart Option Student Loan
- Mobile App Features
- College Payment Plan Tools
Undergraduate Smart Option Student Loan
Sallie Mae offers a specific Smart Option Student Loan for undergraduate students. This loan, seemingly their most popular loan, provides two interest rate options: a fixed interest rate with a 5.74%-11.85% APR and a variable interest rate with a 3.25%-10.01% APR. The fixed interest rate for this loan allows students to have predictable monthly payments as well as an non-changing interest rate. With the variable interest rate, students may save money with a lower interest rate than the fixed interest rates which could pave the way for an overall lower cost for their student loan. The Smart Option Student Loan also gives students three repayment options: the deferred repayment option, the fixed repayment option, and the interest repayment option:
- With the deferred repayment option, those with this loan do not have to repay the loan when they are students or during their grace period (six months after they leave school).
- The fixed repayment option is when students pay $25 each month they are in school and in grace.
- Lastly, the interest repayment option has students pay interest every month they are in school and in grace. This last option focuses on lessening the financial strain after the student leaves school.
Mobile App Features
The Sallie Mae mobile app allows borrowers to make payments for single and/or multiple loans at any time and anywhere. It also allows you to view your payment history, get more information on specific loans, receive payment confirmation in real time, log in with fingerprint identification, receive push notifications, and pay with Siri for iPhone users. The app is available for both Apple and Android systems.
College Payment Plan Tools
According to their website, Sallie Mae provides three tools to help students create a college payment plan. One tool is a video explaining the "1-2-3 approach," which is a way to determine how you will pay for college. Sallie Mae also has a college planning calculator to help students develop a set plan. The last tool available is the scholarship search tool which is meant to help students see the variety of scholarships they could potentially achieve.
- High Fixed APR
- Lack of Transparency
- Automatic Settings
Strict Approval Requirements
The lowest fixed APR rate is higher with Sallie Mae than many other student loan companies. The lowest APR rate that is available for Sallie Mae’s fixed rate option is 5.74%. This could result in borrowers spending significantly more than they would a variable APR rate. Although a variable APR rate is subject to change, it has the chance to be much lower than a 5.74% fixed APR rate.
Lack of Transparency
Sallie Mae’s website does not clearly provide the amount of fees that is applied when there is a late payment on a loan. It does mention that there will be late fees charged if there are late payments to a loan which would overall increase the loan cost, but does not give any easily located details.
The company will automatically group your loans if you have multiple loans with them. Borrowers may have their loans ungrouped with a separate billing statement only if they contact Sallie Mae first and then request the separation. Because this feature is automatic, the borrowers lack the ability to reject the grouping change before it happens.