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Can You Refinance Sallie Mae Student Loans?

Sallie Mae does not refinance student loans, but there's little downside to refinancing their loans with other companies if it will save you money.
Aug. 27, 2019
Loans, Student Loans
Can You Refinance Sallie Mae Student Loans?
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Sallie Mae offers private student loans to undergraduates, graduate students and parents. If you took out Sallie Mae loans to pay for college, you can — and probably should — refinance if it will save you money.

Borrowers can no longer refinance loans directly with Sallie Mae. But you may be able to refinance with Navient, a student loan servicer that was once part of Sallie Mae, if you’re already its customer.

No matter who your servicer is, your best bet is to refinance student loans with whichever company offers you the best deal.

» MORE: Best student loan refinance companies

Should you refinance Sallie Mae loans?

When you refinance student loans, you lose any benefits tied to your existing loan. Sallie Mae student loans offer some features that refinance lenders may not, including:

  • Payment postponements. Sallie Mae lets you defer payments if you return to school or start an eligible internship, residency or fellowship. Sallie Mae offers a military deferment as well.
  • Temporarily reduced payments. Sallie Mae has a Graduated Repayment Period that lets you make interest-only payments for 12 months. This option is not available after your first year in repayment.
  • Co-signer release. If your Sallie Mae loan has a co-signer, you can release them from their obligation after making 12 on-time payments. That time frame is shorter than those many refinance lenders offer.

If you plan to take advantage of any of these features, wait to refinance your loans or make sure your new lender offers a similar program. Otherwise, there’s little downside if you refinance Sallie Mae loans or refinance private loans from any other lender.

Private loans almost always lack the protections and benefits that come with federal student loans, such as income-driven repayment plans and loan forgiveness programs. So if you can qualify for a lower interest rate, refinancing is typically a slam dunk.

While Sallie Mae offers only private student loans, it serviced federal student loans until 2014, when Navient was created. If you want to refinance Sallie Mae loans from before 2014, check whether they’re federal or private before proceeding.

» MORE: Should you refinance federal student loans?

How much refinancing Sallie Mae loans could save you

Sallie Mae offers fixed- and variable-rate private student loans. Currently, its fixed rates are 4.74% – 11.35%, depending on which loan you take out.

Say you have an interest rate of 8.44% and owe $4,300, the average undergraduate private student loan debt based on data from The Institute of College Access & Success. You’d pay $6,382 overall on a 10-year repayment plan. Refinancing at 5% would drop that total to $5,473, saving you roughly $900.

Refinancing at 5% would drop that total to $5,473, saving you roughly $900.

You’d save more if you qualify for a rate lower than 5% or refinance Sallie Mae loans with balances larger than $4,300, such as those for law school or medical school, for example. Borrowers typically need a credit score in at least the high 600s and a stable source of income to refinance, or a co-signer who meets those criteria.

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