Key Takeaways
- Sallie Mae formally expanded its Graduate Loan and Law School Loan products on May 7, positioning them to capture borrowers who lose access to Grad PLUS loans on July 1, 2026.
- Unlike Grad PLUS, Sallie Mae’s products are credit-underwritten — borrowers with thin files or no income will face higher rates or require a cosigner.
- Graduate Direct Unsubsidized Loans remain available after July 1 but are capped at $20,500 per year with a $100,000 aggregate limit; professional students get $50,000 per year up to $200,000 aggregate. Many borrowers will face a funding gap that Sallie Mae and other private lenders are now competing to fill.
- Exhaust all federal loan options — Direct Subsidized and Unsubsidized — before considering any private loan. Federal loans carry income-driven repayment options and death/disability discharge protections that no private lender offers.
Sallie Mae announced May 7 that it is expanding access to its Graduate Loan and Law School Loan products, offering what the company calls competitive rates, no origination fees, and multiple in-school repayment options, up to 100% of the school-certified cost of attendance. The timing is not coincidental. The announcement arrives seven weeks before the federal Grad PLUS program closes to new borrowers on July 1, 2026.
The federal rule change is significant. Under the Working Families Tax Cuts Act, graduate students who were not already enrolled in a program before July 1 will no longer have access to Grad PLUS loans, which allowed borrowing up to the full cost of attendance with no annual cap. New graduate borrowers will instead be limited to Direct Unsubsidized Loans: $20,500 per year with a $100,000 lifetime aggregate limit. Professional students, law, medicine, dentistry, pharmacy, get more room: $50,000 annually and $200,000 in aggregate. For students at programs that cost $60,000 or more per year, that leaves a funding gap measured in tens of thousands of dollars. Sallie Mae is explicitly positioning its products to fill it.
Sallie Mae already originated $7.4 billion in private education loans in full-year 2025, up 6% from the year prior. Those numbers will grow. The company knows it.
Here is what the press release does not tell you, and what you need to know before applying.
The ‘as low as’ rate on a lender’s homepage assumes specific credit conditions that most borrowers won’t meet. Sallie Mae’s press release leads with ‘competitive interest rates’ and ‘no origination fees’, both accurate statements, but neither tells you the rate you’ll actually receive. Sallie Mae does not disclose its minimum credit score or income requirements publicly. That matters especially for graduate borrowers who may have thin credit files and no income, which is exactly the population that was previously covered by Grad PLUS loans that required no credit underwriting beyond a basic adverse credit history check. A 23-year-old first-year law student with $0 income and a 690 FICO is not getting Sallie Mae’s best rate. They may get a rate in the upper range, or they may need a cosigner to qualify at all. Sallie Mae’s fixed rate ceiling is 17.49% APR.
The math matters here. Take a $40,000 annual funding gap at a private loan rate of 10% versus the old Grad PLUS rate of 8.94% for the 2025–26 academic year. Over three years of law school at $40,000 per year, $120,000 total, the interest difference on a 10-year repayment plan is roughly $12,000 in total interest. At 14%, it’s closer to $37,000 more than the Grad PLUS equivalent. The rate you actually receive determines whether private borrowing is a modest premium or a punishing one.
Sallie Mae also does not offer refinancing. Borrowers who want to restructure their private loans after graduation must go to a competitor, SoFi, Earnest, or Citizens. If you’re comparing lenders now, that is worth factoring into the long-term picture. A lender that can refinance you later is worth considering alongside the initial rate.
Before any private loan conversation starts, the answer is always the same: exhaust your federal options first. Complete the FAFSA. Accept all Direct Subsidized and Unsubsidized loans you are offered. If you are enrolled in an eligible program before July 1, 2026, and have already received a Grad PLUS loan for that program, you may qualify for the interim exception that preserves access for up to three years. Check with your financial aid office before assuming you are locked out.
For graduate students who do face a real gap after maxing federal loans, comparing best private student loans and checking private student loan rates across multiple lenders, not just Sallie Mae, will determine how much that gap actually costs you.
