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, residencies, and fellowships.

Choosing your private student loan repayment option

When you apply for a Sallie Mae Smart Option Student Loan, or graduate student loans like the MBA Loan, Health Professions Graduate loan, and Dental and Medical School loan, you can generally 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 $25 every month you’re in school and during your separation period.
  • 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 for recent graduates
  • Deferring your loans if you are in undergraduate or graduate school or an internship/residency/fellowship program
  • Forbearance, if you’re having trouble paying your loans

Graduated Repayment Period for recent graduates

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—from two months before the end of your separation period to two months 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, residency, or fellowship

    With a deferment, you can reduce or postpone payments while you’re resuming undergraduate studies, attending graduate school, or beginning an internship 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 made to students attending a degree-granting institution. Graduated Repayment Period (GRP) allows interest-only payments for the initial 12-month period of repayment when the loan would normally begin requiring full principal and interest payments (which typically begins six months after graduation) or during the 12-month period after GRP request is granted, whichever is later. At the time of GRP request, the loan must be current and the borrower must have graduated with no interruption in enrollment and not be more than 30 days delinquent on any student loan. The borrower may request GRP only during the two billing periods immediately preceding and the two billing periods immediately after the loan would normally begin requiring full principal and interest payments. GRP does not extend the loan term. If approved for GRP, the Current Amount Due that is required to be paid each month after the GRP will be higher than it otherwise would have been without GRP, and the Total Loan Cost will increase.

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 and during your six-month separation or grace period. 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 APRs assume a $10,000 loan to a freshman or first-year graduate, as applicable, with no other Sallie Mae loans. Graduate student pricing for this loan is limited to students enrolling in a Masters/Doctorate level degree program. Graduate Certificate/Continuing Education course work is not eligible.

 Smart Option Student Loan (Undergrad)
This repayment example is based on a typical loan to a borrower who chooses a variable rate and the Fixed Repayment Option for a $10,000 loan, with two disbursements, and a 8.11% variable APR. It works out to 51 payments of $25.00, 119 payments of $151.63 and one payment of $117.89, for a Total Loan Cost of $19,436.86. Variable rates may increase over the life of the loan.

Smart Option Student Loan (Grad), MBA Loan, Health Professions Graduate Loan
This repayment example is based on a typical loan to a first-year graduate borrower who chooses a variable rate and the Fixed Repayment Option for a $10,000 loan, with two disbursements, and a 7.12% variable APR. It works out to 27 payments of $25.00, 59 payments of $216.41 and one payment of $200.56, for a Total Loan Cost of $13,643.75. Variable rates may increase over the life of the loan.

Dental and Medical School Loan
This repayment example is based on a typical loan to a first-year graduate borrower who chooses a variable rate and the Fixed Repayment Option for a $10,000 loan, with two disbursements, and a 6.96% variable APR. It works out to 81 payments of $25.00, 59 payments of $262.29 and one payment of $244.96, for a Total Loan Cost of $17,745.07. Variable rates may increase over the life of the loan.