Sallie Mae Smart Option Student Loans may be more attractive to borrowers with good credit seeking potentially lower initial interest rates and no origination fees. Federal Direct PLUS Loans are better suited for parents of dependent students who may not have strong credit but need access to federal loan benefits, including income-driven repayment options and more extensive loan forgiveness programs.
| Attribute | Sallie Mae Smart Option Student Loan | Federal Direct PLUS Loans |
|---|---|---|
| Interest Rate Type | Offers both fixed and variable interest rates. | Fixed |
| Interest Rate Range | Fixed: 2.99% - 17.49% APR; Variable: 4.37% - 16.99% APR. Lowest rates include an auto-debit discount. | 8.94% for loans disbursed between July 1, 2025, and June 30, 2026. Interest rates are determined annually and fixed for the life of the loan. |
| Loan Fees | Origination Fee: None; Application Fee: None; Late Fee: Yes, 5% of the past due amount, up to $25; Prepayment Penalty: None. | Origination Fee: 4.228% for loans disbursed on or after October 1, 2020. This fee is deducted from each loan disbursement. Application Fee: Not specified, but generally, there is no application fee. Late Fee: Yes. |
| Repayment Options | Standard: Principal and interest payments after the grace period; Extended: Not explicitly mentioned, but other sources mention 10- to 15-year repayment terms; Income-Driven: Sallie Mae doesn't offer income-based repayment plans. Other options include deferred repayment, fixed repayment ($25/month while in school and during the grace period), and interest repayment. | Standard Repayment Plan, Graduated Repayment Plan, Extended Repayment Plan, Income-Contingent Repayment Plan (ICR) is available if the PLUS loans are consolidated into a Direct Consolidation Loan. |
| Deferment and Forbearance Options | Deferment: Available if you return to school at least half-time or are selected for a program like an internship, clerkship, fellowship, or residency. Smart Option Student Loan customers can apply for and receive a maximum of five 12-month deferment periods. Interest continues to accrue during deferment. Forbearance: Allows temporary postponement of payments due to hardship. Interest accrues during both deferment and forbearance, increasing the total loan cost. | Deferment is available while the student is enrolled at least half-time and for six months after they graduate, leave school, or drop below half-time enrollment. You must request a deferment. Interest accrues during deferment. Forbearance is also an option. |
| Eligibility Requirements | U.S. citizens or U.S. permanent residents. Non-U.S. citizens (including DACA students) may be eligible with a creditworthy cosigner who is a U.S. citizen or permanent resident and must provide an unexpired government-issued photo ID. Must meet credit and other eligibility criteria. Attending full-time, half-time, or less than half-time. Creditworthiness is a primary factor. Sallie Mae will check your credit when you submit a loan application. | Must be the biological or adoptive parent (or in some cases, stepparent) of a dependent undergraduate student enrolled at least half-time at an eligible school. The student and parent must complete the FAFSA. Must not have an adverse credit history. Credit scores are not considered. Must meet general eligibility requirements for federal student aid, including U.S. citizenship or eligible non-citizen status. |
| Loan Limits | Minimum: $1,000; Maximum: Up to 100% of the school-certified cost of attendance. | The maximum loan amount is the cost of attendance at the school, minus any other financial aid the student receives. There are no fixed annual or aggregate loan limits. |
| Cosigner Options and Release | Cosigner: Optional. Having a cosigner may increase the likelihood of loan approval. Cosigner Release: Available after graduation, 12 on-time principal and interest payments, and meeting certain credit requirements. The cosigner is equally responsible for repaying the full amount of the loan. | An "endorser" (essentially a cosigner) is an option if the borrower has an adverse credit history. The endorser cannot be the child. |
| Disbursement Process and Timing | Funds are sent directly to the school. The process typically takes about 10 business days from application to disbursement. | The loan funds are sent directly to the school. The school applies the funds to the student's account for tuition, fees, and room and board. Any remaining funds are given to the borrower or student. Disbursement generally occurs around the start of the academic semester. The school will disburse the funds in at least two payments per academic term. First-time borrowers may have to wait 30 days after the first day of the enrollment period to receive the loan money. |
| Customer Service Quality and Support | Sallie Mae is considered to have first-rate customer service. Borrowers having difficulty making monthly payments are encouraged to contact Sallie Mae to discuss available options. They offer resources and support for borrowers. | Contact your loan servicer for assistance. You can find your loan servicer on the Federal Student Aid website. |
| Prepayment Penalties | There are no prepayment penalties. | None |
| Loan Forgiveness Programs | Death and Disability: The loan balance may be waived if the student dies or becomes permanently and totally disabled. | Federal Direct PLUS loans are eligible for discharge upon the death or total and permanent disability of the borrower. Parent PLUS loans may be discharged upon the death of the student. To be eligible for Public Service Loan Forgiveness (PSLF), you will need to repay your loans under an income-driven repayment plan. The Income-Contingent Repayment Plan is the only income-driven repayment plan available to parent PLUS borrowers, and to repay your parent PLUS loans under the Income-Contingent Repayment Plan, you must first consolidate the loans into a Direct Consolidation Loan. |