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Updated: Apr 13, 2023

Is the Sallie Mae Smart Option Loan Really A Smart Option?

Student loans are increasingly becoming a necessity for college students. The Sallie Mae Smart Option Student Loan paints itself as the best solution.
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Sallie Mae and Alpine Bank have teamed up to offer the Smart Option Student Loan. The pair of lenders claims this is an innovative student loan that will cost borrowers less over time than other offers that are available.

Let’s take a look at Sallie Mae’s pitch for its new loan and the reality of what it offers students.

The Pitch

The Smart Option Loan promises to save you money over the life of your loan. It also features a shorter repayment structure meant to get you out of debt more quickly than other private student loans might. These features are meant to encourage responsible payment habits and to reward good credit.


Sallie Mae and Alpine offer 24/7 online account management with no penalty for paying off your balance early. You can apply online and receive a credit decision with an electronic signature option. This quick credit decision could be helpful because summer classes are just around the Memorial Day corner.

The Reality

The reason the Sallie Mae Smart Option Loan could save you money over time is because it requires interest-only payments both during school and during the normal six-month grace period after you finish school (either graduation or otherwise). Making these payments early could keep your debt from dragging on for many years after graduation.

And unlike some credit programs, there is no early repayment penalty or prepayment penalty, meaning you are free to pay more than you owe each month. This expedited payment structure also means larger payments per month once you begin repaying capital.

Other benefits, like the UPromise Rewards program and a 0.25% interest rate reduction with a debit payment plan, come standard on all Sallie Mae loans.

The Bottom Line

Many students are forced to live off of student loans while they pursue their degrees.  With part-time employment difficult to secure and internships increasingly dependent on students’ willingness to work for free, loan money can be a lifeline.

The interest-only payments, while a benefit over the long-term, could be strenuous for students while they are still in school. And the increased monthly payment after graduation is certainly a potential negative to consider.

If you use the Smart Option loan, make sure it will be eligible for consolidation with whatever other loans you may have in order to keep your total monthly payments manageable.

For more information on the Sallie Mae Smart Option Student Loan, click here.