Best private student loan options to cover $12,000 FAFSA gap after scholarships?
My daughter got her financial aid package last week and we're staring at a $12,000 gap even after FAFSA aid and the scholarships she's already received. We're still waiting on 2 more scholarship decisions (fingers crossed!), but I need to be realistic and start looking at private loans as backup. I used Sallie Mae years ago for my own education and don't remember having major issues, but that was literally 20+ years ago. Has anyone recently compared private student loan options? Are there better alternatives than Sallie Mae these days? Looking for decent interest rates and flexible repayment terms. Any advice from parents who've recently gone through this would be super helpful!
19 comments
Join the conversation
Madison Allen
Have you looked into Parent PLUS loans first before going the private route? The current fixed interest rate for 2025-2026 is 6.8%, which might be better than what you'd get privately depending on your credit. The application process is pretty straightforward through studentaid.gov once you have your FSA ID.
0 coins
Katherine Harris
•Thanks for mentioning that! We did consider the Parent PLUS loan option, but my credit took a hit last year after some medical bills, so I'm not sure if I'd get approved. Plus, I'm concerned about the origination fee (isn't it like 4%?). I was hoping to compare all options side by side.
0 coins
Joshua Wood
sallie mae SUCKS now!!! they started out ok but then kept raising my interest rate every chance they got. ended up paying almost DOUBLE what i borrowed by the time i was done. stay away!!!!
0 coins
Katherine Harris
•Oh wow, that's concerning to hear. Definitely don't want to end up in that situation. Did you find any better alternatives after your experience with them?
0 coins
Justin Evans
Shop around for sure. SoFi, Earnest, Discover, and even your local credit union often have competitive student loan rates. The key factors to compare are: 1. Fixed vs. variable rates 2. Loan terms (5-20 years typically) 3. Repayment options during school (full payment, interest-only, or deferred) 4. Origination fees (many private lenders don't charge these) 5. Cosigner release options (usually after 12-24 months of on-time payments) I'd recommend getting pre-qualified with 3-4 lenders to compare actual offers before making a decision. Most do soft credit pulls for pre-qualification so it won't affect your credit score.
0 coins
Emily Parker
•This is great advice! I'd also add to check if they offer any kind of hardship options. My son had to take a medical leave for a semester and our credit union was WAY more flexible than his friend's private lender (don't remember which one). That flexibility can be invaluable if anything unexpected happens.
0 coins
Ezra Collins
have u tried appealing the aid package? my daughter got an extra $5500 just by writing a letter explaining our financial situation changed bcuz my hours got cut at work. might be worth a shot before loans
0 coins
Katherine Harris
•That's a great point. We haven't tried appealing yet. Did your daughter appeal directly to the financial aid office? Did she need to provide any documentation about your reduced hours?
0 coins
Victoria Scott
I worked at Discover Student Loans for 3 years until 2024 and can tell you most private loans are similar BUT the big difference is customer service when issues come up. Discover and Citizens Bank consistently ranked highest for student loan customer satisfaction in my experience. Sallie Mae hasn't been great for years now.
0 coins
Katherine Harris
•Thanks for the insider perspective! Customer service is definitely important to me - I want to be able to actually talk to someone if issues come up. I'll check out Discover and Citizens Bank.
0 coins
Benjamin Johnson
We tried for DAYS to get through to someone at Federal Student Aid to discuss our Parent PLUS loan options and kept getting disconnected. Finally used Claimyr.com to get through - they connected us to an agent in about 10 minutes after we'd wasted hours trying ourselves. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ The agent was able to explain all our federal loan options and we ended up not needing private loans at all. Definitely worth trying all federal options first before going private.
0 coins
Katherine Harris
•That's interesting - I've been trying to call FSA too with questions about Parent PLUS eligibility with my credit situation. Kept getting the busy signal or disconnected. I'll check out that service, thanks!
0 coins
Joshua Wood
also try talking 2 the schools financial aid office - my nephew got an institutional grant for $4000 that wasnt in his original package just by going in person and explaining their situation
0 coins
Katherine Harris
•Great suggestion. My daughter's orientation is next week, so we'll make a point to stop by the financial aid office while we're on campus.
0 coins
Madison Allen
If you do end up needing private loans, one more tip: many lenders offer an interest rate reduction (usually 0.25%) if you set up automatic payments. It doesn't sound like much, but it adds up over the life of the loan. Also, some lenders offer graduation rewards or on-time payment incentives that can help reduce the overall cost.
0 coins
Zara Perez
•YES! Even small discounts matter with big loans. My daughters lender gave .5% off for autopay AND another .25% when she maintained a 3.0 GPA. Saved thousands over the loan.
0 coins
Katherine Harris
Update: Thank you everyone for the great advice! We visited the financial aid office during orientation and explained our situation. They found an institutional grant for $3,500 and helped us understand our Parent PLUS options better. We're still exploring private loans for the remaining gap, but narrowed it down to either our local credit union or Discover based on your recommendations. I'll post again with our final decision in case it helps future families!
0 coins
Ava Johnson
•That's awesome news! So glad the financial aid office was able to help close part of that gap. Between you and your local credit union vs Discover, I'd definitely lean toward the credit union if their rates are competitive - they tend to be much more flexible and personal when life happens. Plus you can walk in and talk to someone face-to-face if needed. Good luck with whatever you decide!
0 coins
Vince Eh
•Congratulations on getting that institutional grant! That's a huge help. I agree with @Ava Johnson about credit unions - they really do tend to be more personal and understanding. My family has been with our local credit union for years and when my son needed a student loan, they worked with us on everything from the application to setting up a payment plan that worked with our budget. Definitely worth comparing their rates and terms closely. Keep us posted on what you decide!
0 coins