If you have Sallie Mae student loans, you may be hoping you might qualify for student loan forgiveness. The reality is that Sallie Mae is a private lender now. And despite what you may have heard, there generally is no such thing as private student loan forgiveness. Forgiveness is limited to federal education loans.
But while you can’t get private Sallie Mae student loans forgiven, there are other alternatives to explore. Read on to learn about the available options.
Table of Contents
Key Points
• Sallie Mae loans, now serviced by private lenders, do not qualify for federal forgiveness programs.
• Loan forgiveness is generally reserved for federal student loans under specific programs.
• Private student loans might offer assistance or flexible terms, but typically lack formal forgiveness options.
• Borrowers with older Sallie Mae loans might have had federal loans, which may be eligible for forgiveness if consolidated into a Federal Direct Consolidation Loan.
• It’s important for borrowers to verify their loan type and explore repayment options or refinancing for potential relief.
Can Older Sallie Mae Loans Be Forgiven?
If you’re confused about whether your Sallie Mae loans are private or federal student loans, it may be because the company has evolved over the years.
Though Sallie Mae, aka SLM Corp., no longer services federal loans, that wasn’t always the case.
Sallie Mae was created in 1972 as the Student Loan Marketing Association, a government-sponsored enterprise that serviced federal education loans. Even though it became privatized in 2004, the company continued to service federal loans made under the Federal Family Education Loan (FFEL) Program until that program ended in 2010. Then, in 2014, Sallie Mae split into two companies: SLM Corp. and Navient Corp and shifted its federal student loans to Navient. In early 2022, Navient transferred federal student loans to Aidvantage.
So, if you have an older loan — one that originated before 2014 — it may have a federal loan that started out with Sallie Mae and moved on to Navient and then Aidvantage. And if that’s the case, you may be able to apply for Sallie Mae loan forgiveness.
Applying can be complicated, and you may have to consolidate your loans into a Federal Direct Consolidation Loan as part of the process.
You can see if your old debt is a federal education loan by visiting the Federal Student Aid website. If it is, and you want to seek loan forgiveness, you’ll eventually make your application to the government.
You can contact your current student loan servicer for information on how to get started.
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What If You Don’t Qualify for Loan Forgiveness?
If federal student loan forgiveness seems like a long shot for you, don’t despair — you also may want to look into student loan deferment or forbearance. These strategies allow qualifying borrowers to temporarily reduce or stop their federal student loan payments. However, depending on the type of federal loan you have, interest may continue to accrue while payments are paused, which could increase the overall cost of the loan.
Looking for a more long-term solution? An income-based repayment plan can offer qualified applicants another way to lower federal student loan payments. The three current options limit how much money you put towards student loans each month based on family size and discretionary income.
You can contact your loan servicer for assistance with federal loan repayment.
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Are There Alternatives to Private Student Loan Forgiveness?
Although there currently is no such thing as Sallie Mae private student loan forgiveness, there are alternatives available to borrowers struggling to manage their private loans.
Private lenders don’t offer income-driven repayment plans. But if you feel comfortable calling your lender directly, you could ask about other repayment plans they might offer or what options they might have for your situation. At the very least, it doesn’t hurt to learn more about your loans.
And some private lenders, including Sallie Mae, offer deferment and forbearance for those who qualify. The terms and conditions vary among lenders.
Something to consider if you’re thinking about deferment or forbearance is that — just as with federal loans — even though the payments are paused, interest may continue to accrue. And this can increase the total cost of the loan.
Can You Refinance Sallie Mae Student Loans?
If you can’t make any headway with your current repayment plan, you can always look into refinancing student loans.
Though there are advantages to refinancing student loans, there are potential drawbacks to consider. For instance, if you refinance your federal loans through a private lender, you lose access to important benefits, such as income-driven repayment plans and federal forgiveness.
Sallie Mae doesn’t offer student loan consolidation and refinancing anymore, but you could potentially reduce your interest rate by refinancing your student loans with a different private lender, especially if you have a good credit history and strong potential earnings.
If you’re approved, the new lender will pay off your old loans and issue you one new student loan — hopefully with a lower interest rate. A lower rate can save money on interest payments over the life of the loan, provided that the loan term isn’t extended.
You could extend your loan term if you’re hoping to make your monthly payments more manageable, or you could opt for a shorter loan term to try to get out of debt sooner. Just be aware that you may pay more in interest with an extended loan term.
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The Takeaway
Lender Sallie Mae used to offer federal student loans, and if you received one, you may be able to qualify for loan forgiveness. But federal student loan forgiveness can be hard to get — and if you have a private student loan through Sallie Mae, federal forgiveness is not available. There are, however, repayment alternatives you may want to explore.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
Does Sallie Mae service federal loans?
Sallie Mae only services private student loans, though that wasn’t always the case. If you have a loan that originated before 2014, it may have been a federal loan that started out with Sallie Mae and then moved to Navient. In early 2022, Navient shifted its federal student loans to a new servicer, Aidvantage.
How do I know whether my student loan is private or federal?
You can visit the Federal Student Aid website and log into your account. Information about your federal loans will be listed in your dashboard.
What student loans are not eligible for forgiveness?
Private student loans are not eligible for federal forgiveness. Only federal student loans qualify for federal forgiveness programs.
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