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Are Smart Option Student Loans and Signature Loans eligible for Federal Student Loan Consolidation?

The answer is NO. The Sallie Mae Smart Option Student Loans and Signature Loans are not eligible for the Direct Student Loan Consolidation Program because these loans are Private.

Do you have a Smart Option Student Loan or a Signature Student Loan? If your answer is “Yes”, you should continue reading this article to understand more about these loans:

What is a Smart Option Student Loan?

The Smart Option Student Loan is the only private student loan providing budget flexibility for graduating students. Students who graduate and maintain their Sallie Mae loans in good standing can request to make 12 interest-only payments instead of full principal and interest payments after their separation period.

You have various financial and educational benefits when choosing this type of loan such as low interest rates, repayment options that can be as low as $25 (While the borrower is IN SCHOOL)  and you can borrow up to 100% of your education cost.

What is a Signature Student Loan?


The Signature Student Loan is a school-certified loan that allows students to borrow up to the full cost of attendance less other financial aid received. These loans are typically utilized to supplement the money that you have already borrowed from federal loans. If you have a signature loan you may be eligible for zero fees or 0.50 percentage interest rate reduction by signing up for automatic payments.


These loans are usually more difficult to get than federal loans because they are credit based or require a cosigner. Note that this cosigner could be released after 24 on time payments.

The main downfall of the Sallie Mae “Signature Student Loan” and the Sallie Mae “Smart Option Student Loan” is that both loan types are Private loans and as such your options as a borrower are really limited. They won’t offer you any income based repayment plans or consolidate them along with government loans.  The lowest payment would be an interest only payment which they will give you just for 12 months.


I would recommend that you to stay away from these loans. Just like other student loans, the path to get these loans is not so complicated but the path to get out of them will probably be a headache.