Federal Direct Subsidized Loans are generally more favorable due to the absence of a credit check, availability of loan forgiveness programs, and no interest accrual during deferment (for subsidized loans). However, Sallie Mae Smart Option Student Loans may be suitable for borrowers who need higher loan amounts or can benefit from cosigner release options.
| Attribute | Federal Direct Subsidized Loans | Sallie Mae Smart Option Student Loan |
|---|---|---|
| Interest Rate (Fixed or Variable) | Fixed. For loans disbursed on or after July 1, 2025, and before July 1, 2026, the interest rate is 6.39%. This rate is fixed for the life of the loan. | Offers both fixed and variable interest rates. As of June 3, 2025, fixed rates ranged from 3.45% to 16.49% APR, and variable rates ranged from 4.37% to 15.99% APR. Variable rates may fluctuate; fixed rates remain constant. |
| Loan Amount Limits | Dependent Undergraduates: Annual limits range from $5,500 to $7,500, with subsidized portions ranging from $3,500 to $5,500. The aggregate loan limit is $31,000, with up to $23,000 subsidized. Independent Undergraduates: Annual limits range from $9,500 to $12,500, with subsidized portions ranging from $3,500 to $5,500. The aggregate loan limit is $57,500, including up to $23,000 in subsidized loans. | Minimum loan amount is $1,000. Maximum can be up to 100% of the school-certified cost of attendance, less any other financial aid received. Loan amounts through partner websites may be subject to lower maximums. |
| Repayment Options | Several options are available, including standard, extended, graduated, and income-driven repayment plans. The standard repayment term is 10 years, but it can be extended up to 30 years. | In-school: defer payments, fixed $25 payments, or pay monthly interest. Standard: Principal and interest payments for 10 to 15 years. Graduated Repayment Period (GRP): Interest-only payments for the initial 12 months. |
| Deferment and Forbearance Options | Available if you're unable to make payments. Deferment lets you temporarily suspend payments, and interest does not accrue on subsidized loans during deferment. Forbearance allows you to temporarily suspend or reduce payments, but interest accrues on all loan types during forbearance. | Deferment options include active duty military, return-to-school, and internship/residency. Maximum of five 12-month deferment periods. Interest is charged during deferment and may be added to the principal. |
| Eligibility Requirements | You must be a U.S. citizen or permanent resident. You need to be enrolled at least half-time in a degree-seeking program. Satisfactory academic progress is a must. You cannot be in default on a federal student loan. Subsidized loans require demonstrated financial need. | Enrolled, accepted for enrollment, or previously enrolled at an eligible degree-granting institution within the last 365 days. U.S. citizens or permanent residents are eligible. International students are eligible with a creditworthy cosigner. Students attending full-time, half-time, or less than half-time, or taking prerequisite classes are eligible. |
| Credit Score Requirements | Federal Direct Subsidized Loans do not require a credit check. | Applicants must satisfy credit requirements. |
| Cosigner Options | Cosigners are not an option for Federal Direct Subsidized Loans. | Cosigner not required for U.S. citizens or permanent residents, but encouraged. Cosigner release available after graduation, 12 on-time payments, and meeting credit requirements. |
| Fees | There is a loan origination fee. For loans first disbursed on or after October 1, 2020, the origination fee is 1.057% of the loan amount. This fee is deducted from each loan disbursement. | No origination fees. Late payment fee is 5% of the past due amount, up to $25. No prepayment penalties. |
| Repayment Term Length | Standard repayment is 10 years, but can be extended. Consolidation loans can have repayment terms between 10 and 30 years. | Typically 10 to 15 years. Some loans subject to a $50 minimum principal and interest payment may have a loan term less than 10 years. |
| Loan Forgiveness Programs | Several loan forgiveness programs are available for specific professions. | Sallie Mae doesn't offer loan forgiveness programs, except in cases of death or total and permanent disability. Borrowers may be eligible for federal loan forgiveness programs. |
| Servicer Quality and Customer Support | Your loan servicer provides updates, repayment information, and assistance. | Sallie Mae claims to be committed to providing a superior service experience with U.S.-based call centers. |
| Prepayment Penalties | There are no prepayment penalties. You can pay off the loan early without any extra charges. | There are no prepayment penalties. |