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Federal vs private student loan repayment options

When it comes to repaying student loans, there are distinct differences between federal and private student loans.

Federal student loans don’t have in-school repayment options. After your grace period, you generally can request one of several types of plans. Standard, extended, and graduated plans can help you adjust the amount of time you have to pay, while income-related plans can help base your payments on income.

Private student loans can offer both in-school and deferred repayment options. After your separation or grace period, when you begin to make principal and interest payments, you generally won’t have the breadth of repayment plans as with federal loans. There may be other programs available for budget flexibility, such as our Graduated Repayment Period.

To find out the repayment term for your student loans (how long you will be paying them), log in to your Sallie Mae account or look at the promissory notes you got when you first accepted your loan.

Private student loan repayment options

Private student loans generally don’t have the same options as federal loans. Those specific options can differ from lender to lender. Here are some of the repayment options that you have throughout the life of your loan when you’ve just graduated from college, and when you’re deferring for grad school, going back to college, or for internships, clerkships, fellowships, or residencies.

Choosing your private student loan repayment option

When you apply for a Sallie Mae® Smart Option Student Loan®, or a graduate student loan like the Graduate School Loan, MBA Loan, Health Professions Graduate Loan, Law School Loan, Medical School Loan, or Dental School Loan you can choose one of three in-school options to pay back your loan:

  • Deferred repayment: Make no scheduled loan payments while you’re in school and in your separation or grace period.
  • Fixed repayment: Pay a fixed amount every month you're in school and in grace.
  • Interest repayment: Pay interest every month you’re in school and during your separation period.

Note: For the Medical Residency and Relocation Loan, Dental Residency and Relocation Loan, or Bar Study Loan, deferred repayment is the only option available, because these loans are designed to cover post-graduate school expenses.

Once you’ve chosen your in-school repayment plan, it can’t be changed while you’re in school and during your separation or grace period.

Once you’ve left school and are past your separation or grace period, you’ll make principal and interest payments for the remainder of your repayment term. There are several exceptions:

  • Graduated Repayment Period
  • Deferring your loans if you are in undergraduate or graduate school or an internship/clerkship/fellowship/residency program
  • Forbearance, if you’re having trouble paying your loans

Graduated Repayment Period

This benefit, specially created for our loans, gives you time to transition from school to career before you have to make principal and interest payments.

  • You can make interest-only payments for a year after your separation period.
  • You can use it for Smart Option Student Loans or any of our graduate loans.
  • You have to apply for a Graduated Repayment Period within a specific time frame—the six billing periods before and the 12 billing periods immediately after you begin principal and interest payments.

    • Learn more about the Graduated Repayment Period

    Deferring your student loans when you’re returning to college, going to graduate school, or in an internship, clerkship, fellowship, or residency.

    With a deferment, you can reduce or postpone payments while you’re resuming undergraduate studies, attending graduate school, or beginning an internship, clerkship, fellowship, or residency.

    Learn more about deferring loans while in graduate school

    Forbearance, if you’re having trouble paying your student loans

    Forbearance lets you temporarily postpone your student loan payments. It can help you avoid delinquency and default if you're facing temporary financial difficulty. Since it may increase your Total Loan Cost, you should first see if your cosigner (if you have one), or a family member or friend, can help you with your student loan payments for a short time.

    We’re committed to working with you if you’re having financial difficulties. Call us at 800-472-5543 (800-4-SALLIE) when you realize that you and your cosigner (if you have one) can’t make student loan payments. We may be able to offer options, like forbearance, that can help.

    Learn more about facing financial difficulties

Available for loans used to pay qualified higher education expenses at a degree-granting institution. Graduated Repayment Period (GRP) allows interest-only payments for 12 billing periods after principal and interest repayment begins. At the time of GRP request, the loan must be current (not past due). Customers may request GRP during the six billing periods before and the 12 billing periods immediately after the loan first enters principal and interest repayment. GRP does not extend the loan term. GRP increases the Total Loan Cost and monthly payments after the GRP will be higher than they would have been without it.

Interest rates for Fixed and Deferred Repayment Options are higher than interest rates for the Interest Repayment Option. You're charged interest starting at disbursement, while in school, during your separation/grace period, and until the loan is paid in full. The repayment option that is selected will apply during the in-school and separation/grace periods. When you enter principal and interest repayment, Unpaid Interest will be added to your loan's Current Principal. Variable rates may increase over the life of the loan. Advertised variable rates reflect the starting range of rates and may vary outside of that range over the life of the loan. Advertised APRs assume a $10,000 Smart Option Student loan to a freshman with no other Sallie Mae loans and a $10,000 Dental School Loan, Law School Loan, MBA Loan, Medical School Loan, Graduate School Loan, or Health Professions Graduate Loan to a first-year graduate.