Is Sallie Mae a Federal Loan Provider? What Borrowers Should Know in 2025

Federal student loans and private student loans have important differences that affect borrowers. So if you're looking at your options, you may want to know if Sallie Mae loans are federal or private.

In most cases, Sallie Mae loans are private. This guide covers the company's history and what types of loans Sallie Mae offers.

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Is Sallie Mae a federal loan provider?

Sallie Mae isn't a federal student loan provider; it's a private student loan lender. However, the question of whether Sallie Mae loans are federal or private isn't far-fetched given the company's history.

“Sallie Mae started off as a government-sponsored enterprise (GSE) in 1972 and functioned as a secondary market for federal student loans. It privatized in 2004,” explains Mark Kantrowitz, author of “How To Appeal for More College Financial Aid.”

Even after the company privatized, it continued to service some federal student loans until 2014 as part of its operations. At that time, the company was divided into two separate entities, Sallie Mae and Navient.

Navient took over federal loan servicing, while Sallie Mae originated private student loans. Sallie Mae continues to be a big name in the private student loan space, but Navient's contract with the Department of Education ended in 2021, and in October 2024, it transferred its remaining loans to MOHELA for servicing.

“The Sallie Mae name persists in people's memory going back to the original history,” says Jack Wang, a college financial aid adviser at Innovative Advisory Group and host of the Smart College Buyer podcast.

What types of loans does Sallie Mae offer today?

Though Sallie Mae is no longer a federal student loan servicer, it continues to manage the private loans it issues to borrowers.

“Sallie Mae now makes private student loans, like any other private student loan lender. It is among the larger private student loan lenders, based on the origination volume disclosed in Sallie Mae's 10-Q and 10-K SEC filings,” says Kantrowitz.

The types of private student loans Sallie Mae offers today include:

• Undergraduate student loans
• Graduate student loans
• Career training student loans
• Nursing school student loans
• Flight school student loans
• MBA student loans
• Law school student loans
• Medical school student loans 
• Health professions student loans
• Dental school student loans
• Bar exam loans
• Medical residency loans
• Dental residency loans

When you're going to college, it's typically a smart move to max out federal student loans and any gift aid like scholarships and grants first. But if you have a funding gap due to federal loan limits, Sallie Mae offers a range of private student loans that can help you cover the remainder.

“Borrowers may want to consider Sallie Mae for private student loans for both undergrad and graduate programs,” says Wang. “Sallie Mae also offers loans for specific programs, such as flight school, which may not be available through other lenders. They also offer some loans for vocational or technical training programs, again, which may not be available at all lenders.”

How does a Sallie Mae loan differ from a federal loan?

Both Sallie Mae private student loans and federal student loans can help you reach your goal of paying for school. But the similarities generally stop there.

The main differences are in the repayment options, eligibility, interest rates, and benefits. Here's an overview of how a Sallie Mae loan differs from a federal loan.

Can Sallie Mae loans be forgiven?

Sallie Mae loan forgiveness isn't an option, as student loan forgiveness is only available to federal student loan borrowers.

Federal loan programs such as Public Service Loan Forgiveness (PSLF) and income-driven repayment (IDR) forgiveness allow eligible borrowers to have their loans forgiven after meeting certain requirements. Private student loans, including those from Sallie Mae, aren't eligible. However, refinancing Sallie Mae loans can be a helpful strategy since you may be able to lower your interest rate.

There's a caveat for borrowers who took out Sallie Mae loans prior to 2014. You may have federal loans that were later transferred to Navient and then Aidvantage or MOHELA. If you're unsure about whether your loans are private or federal, you can look at your credit report or loan statements to find out.

It's important to note that while private Sallie Mae loans can't be forgiven, if you take out a Sallie Mae loan and die or become permanently disabled, you may qualify for loan discharge.

What to consider before borrowing from Sallie Mae

Before taking out Sallie Mae loans, first review the eligibility requirements. If you have no credit history or poor credit, you'll likely need to add a cosigner to your application to qualify. A cosigner can be a parent or other loved one who agrees to share the responsibility of repayment with you as the primary borrower. This reduces your risk in the lender's eyes and may lead to lower interest rates and higher chances of approval.

Compare interest rates and other loan terms from top lenders before applying with Sallie Mae, and understand the differences between fixed and variable rates. While a fixed rate will never change, a variable rate can fluctuate throughout your repayment due to shifts in the market. Review repayment terms so you know how long you have to pay back the loan, and research hardship options.

“Borrowers typically just look at the rate and payment, but terms such as forbearance periods can be important, especially those who are entering higher-risk industries, or will have jobs with highly variable income,” says Wang.