Two students looking for the answer to, "Is Sallie Mae a federal loan?"

Is Sallie Mae a Federal Loan or Private Loan?


Are you wondering, “Is Sallie Mae a federal loan?” Then be sure to read this article for a straightforward and easy to understand answer!

Higher education is super important – but it’s also extremely expensive. 

That’s why Americans owe a total of $1.75 trillion in student loan debt.

To make smart choices about your education, you need to understand the complexities of the student loan landscape. And boy, is it complex!  

In this article, I’ll answer a common question: Is Sallie Mae a federal loan?

The answer is no – but why? And what does it mean for borrowers? I’ll explain all of that below!

A woman shares how Sallie Mae student loans helped her achieve her dreams of a college education.
Private student loans from Sallie Mae have helped many people pursue their higher education dreams. 
Source: Sallie Mae

What’s The Difference Between Private and Federal Student Loans?

So you’re wondering: Is Sallie Mae a federal loan? The answer to that question is “no.” But before I can explain exactly why, it’s important to understand what sets federal loans and private loans apart.

Federal student loans are funded by (you guessed it!) the federal government. Private loans, on the other other hand, are funded by private organizations like banks and credit unions. And that’s the main difference between private and federal student loans.

Of course, as a student or parent, you probably don’t really care about the technicalities of who’s funding the loan. What you want to know is which type of loan is cheaper, and which is easier to get.

In general, federal student loans are cheaper than private student loans – meaning they have lower interest rates. 

Federal student loans have fixed interest rates of 5.50%-8.05%*, while private student loans from Sallie Mae have interest rates ranging from 4.15%-15.70%*. That’s why federal loans are often a student’s first choice.

But private loans can be useful when you need additional funding for your education, and they’re often easier to get. And with private loans from Sallie Mae, you can apply alongside a cosigner, which makes it three times more likely that your loan application will be accepted.

Is Sallie Mae a Federal Loan or Private Loan?

Sallie Mae offers private student loans. That’s because Sallie Mae has been a private company since 2004.

But I can see why you might associate Sallie Mae with the government and why you might be asking, “Is Sallie Mae a federal loan?” 

Sallie Mae was a government program for decades. It was created by Congress in 1972 to help manage student loans. That all changed in 2004 when Sallie Mae broke up with Uncle Sam and started riding solo.

But here’s where things get complicated: Sallie Mae kept servicing some federal loans until 2014, at which point it started handling only private student loans. 

So, all new Sallie Mae loans are private, and so are all Sallie Mae loans taken out after 2014. But if you took out a Sallie Mae loan in 2014 or earlier, it might be a federal student loan, in which case it’s probably now being managed by a different servicer. 

Check out this article for a complete list of the best private student loans available.

What Types of Loans Does Sallie Mae Offer?

Is Sallie Mae a federal loan? No, Sallie Mae only offers private student loans. But now it’s time to dig a little deeper.

Sallie Mae offers three types of private student loans:

  • Undergraduate student loans
  • Graduate student loans
  • Career training and trade school loans

Below, I’ll break those categories down a little further.  

Undergraduate Student Loans

Sallie Mae makes it quick and easy to apply for a private undergraduate loan. And while the interest rates might be higher than what you see with federal student loans, there’s still a lot to like about what Sallie Mae offers undergraduates.

Sallie Mae has both fixed-rate and variable-rate loans:

  • Fixed-rate loans – Interest rates run from 4.15% to 15.49% annual percentage rate (APR)*, and your rate will remain the same as you pay back the loan.
  • Variable-rate loans – Interest rates range from 5.37% to 15.70% APR*, and the rate could change as you pay back the loan.

When you apply for a loan from Sallie Mae, you should consider using a cosigner. Sallie Mae suggests it because it increases your chances of getting accepted. That’s probably why 87% of Sallie Mae’s undergraduate loans are cosigned.

Private student loan cosigners must be at least 18 years of age, a U.S. citizen, creditworthy, and able to help the student pay back the loan being borrowed.
A cosigner can help students qualify for more loans and build their credit. 
Source: Sallie Mae

Applying with a cosigner is especially important for traditional undergraduates – because if you’re fresh out of high school, you probably don’t have much credit history of your own!

Read here for a full list of the best student loans for bad credit.

And when will you start paying Sallie Mae back? That depends on the repayment option you choose.

Here are the repayment options for undergraduate loans with Sallie Mae:

  • Pay the interest on the loan while still in school and during a 6-month grace period, then start the full-on repayment process. This could save you 13% of the total loan cost if you start doing it as a freshman.
  • Pay just $25 per month while in school and during the 6-month grace period. The impact won’t be as significant, but it will still decrease the total cost of the loan.
  • Defer all payments until after your studies and 6-month grace period are over. This will eliminate the stress of making payments while studying, but your loan will cost more in the end.

Graduate Student Loans

Sallie Mae offers a wide variety of graduate school loans. These loans are generous and comprehensive, covering all your educational expenses.

The range of possible interest rates depends on the specific type of loan:

  • General graduate student loan: 4.15% – 14.97% APR*
  • MBA loan: 4.15% – 14.97% APR*
  • Medical school loan: 4.15% – 14.96% APR*
  • Medical residency loan: 6.40% – 13.34% APR*
  • Health professions graduate loan: 4.15% – 14.97% APR*
  • Dental school loan: 4.15% – 14.96% APR*
  • Dental residency loan: 6.40% – 13.34% APR*
  • Law school loan: 4.15% – 14.97% APR*
  • Bar study loan: 7.01% – 17.72% APR*

For all of these loans, you can choose between fixed rates and variable rates. 

And when it comes to repayment, Sallie Mae offers most graduate students three different options:

  1. Pay Later. You won’t have to start repaying the loan until six months after you’ve finished studying.
  2. Pay a Little and Save. You’ll make monthly payments of $25 per month even while you’re studying, decreasing the total cost of your loan.
  3. Pay Interest and Save Even More. You’ll pay the interest on your loan while you study, bringing your interest rate down by 0.5%. 

General graduate student loans from Sallie Mae must be paid off after 15 years, and the clock will start ticking six months after you finish school. 

Career Training and Trade School Loans

Are you interested in career training or trade school? If so, then you’re right to be asking, “Is Sallie Mae a federal loan?”

Sallie Mae does not offer federal loans anymore, but it does provide private loans for trade school and career training. So if you want to upskill and improve your future job prospects, Sallie Mae can help.

You can use your loan from Sallie Mae to pay for all your educational expenses, including:

  • Tuition
  • Books
  • Travel
  • Equipment
  • Supplies

You’ll have to repay the loan with interest, but at least you can choose between a fixed and variable rate. Sallie Mae offers fixed rates between 4.15%  and 15.69% APR* for career training loans. Variable rates can go a bit higher, ranging from 5.37% to 16.46% APR*.

And as with other Sallie Mae loans, you can start repaying the loan while you’re still studying, or choose to wait until your education and a 6-month grace period are over. 

Are you in a position to make payments sooner? Then go for it! Your loan will be cheaper as a result.

Do you really need to focus on your schooling for now? Then leave the payments for later.

Both repayment options have their benefits. What’s great about Sallie Mae is that they allow you to choose!

For more details, be sure to check out this Sallie Mae review.

Commonly Asked Questions About Is Sallie Mae a Federal Loan 

What are Alternatives to Sallie Mae?

Sallie Mae might be the most famous provider of private student loans, but it’s far from the only option. Sallie Mae alternatives include:

Would Sallie Mae Student Loans Be Forgiven?

Unfortunately, Sallie Mae student loans don’t qualify for student loan forgiveness. So if you can’t make your payments with Sallie Mae, check if you qualify for a deferment, which allows you to stop payments while you pursue additional education. You could also try to refinance your loan with another lender. 

Are Any Sallie Mae Loans Federal?

Currently, none of Sallie Mae’s loans are federal. In the past, Sallie Mae was a government program that issued federal student loans, but that ended in 2014. Any loans that Sallie Mae issued before 2014 could be federal, but they’d be managed by a different lender now.

Does Sallie Mae Count as Federal Student Aid? 

Sallie Mae loans do not count as federal student aid. Sallie Mae only issues private student loans. 

Are Private Student Loans Eligible for Forgiveness?

Private student loans aren’t usually eligible for forgiveness. Often, private student loans are only forgiven if the borrower becomes permanently disabled or deceased. If you can’t afford to pay your private student loan, you should see if you’re eligible for a deferment or try to refinance.  

Is Sallie Mae a Federal Loan for Students? 

Sallie Mae no longer issues or services federal student loans. The student loans that Sallie Mae offers are all private, meaning they have nothing to do with government programs. This has been the case since 2014, when Sallie Mae stopped servicing federal student loans.

Is Sallie Mae a Federal Loan for College Students? 

Sallie Mae offers private student loans, not federal student loans. That means the interest rates are often higher, and students have little chance of having their loans forgiven. Still, Sallie Mae attracts student borrowers by making it quick and easy to take out a loan. 

Are Sallie Mae Loans Subsidized or Unsubsidized? 

Sallie Mae student loans are private, meaning they’re not subsidized by the federal government. In fact, they have nothing to do with the federal government whatsoever. When people talk about “subsidized” and “unsubsidized” loans, they’re generally referring to federal student loans – which Sallie Mae doesn’t offer. 

Is Sallie Mae a Good Student Loan?

Sallie Mae is a reputable provider of private student loans. Generally, students are better off using federal loans if possible because the interest rates are often lower. But if it’s a private loan you’re after, you’ll appreciate Sallie Mae’s ease of use and high acceptance rate. 

*rates shown are accurate at the time of writing and are subject to change.  

Sallie Mae Disclosures:

*Borrow responsibly
We encourage students and families to start with savings, grants, scholarships, and federal student loans to pay for college. Evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan.
Loans for Undergraduate & Career Training Students are not intended for graduate students and are subject to credit approval, identity verification, signed loan documents, and school certification. Student must attend a participating school. Student or cosigner must meet the age of majority in their state of residence. Students who are not U.S. citizens or U.S. permanent residents must reside in the U.S., attend school in the U.S., apply with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident), and provide an unexpired government-issued photo ID. Requested loan amount must be at least $1,000.
Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment.
2 For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time.
3 Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Information advertised valid as of 07/12/2024.
Sallie Mae loans are made by Sallie Mae Bank.