Can I combine FAFSA Direct loan with Sallie Mae loan instead of Parent PLUS?

My son just got his financial aid package from State University, and I'm trying to figure out our options. He was awarded the $5,500 federal loan through FAFSA (I think it's called a Direct loan?), but that barely covers a fraction of his costs for the year. The financial aid office basically just told us to apply for a Parent PLUS loan for the remaining $17,000, but I don't want to take on that debt myself. Can he apply for a Sallie Mae private student loan on his own to cover the gap instead of us doing the Parent PLUS? Would this cause any problems with his federal aid? The financial aid counselor seemed to push the Parent PLUS really hard and barely mentioned other options.

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20 comments

Rajiv Kumar

•9M

Yes, your son can absolutely apply for private loans like Sallie Mae in addition to the federal Direct loans he received through FAFSA. The $5,500 is probably his Direct Subsidized/Unsubsidized loan limit as a first-year dependent student. Here's what you should know: 1. The federal Direct loan ($5,500) will always have better terms than private loans - fixed interest rates, income-driven repayment options, forgiveness possibilities 2. Private loans like Sallie Mae can fill the gap, but typically require a credit check and possibly a co-signer 3. Taking private loans won't affect his federal aid eligibility Financial aid offices often push Parent PLUS loans because they're federal loans and the money goes directly to the school. But you're not obligated to take that option.

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Chloe Delgado

•9M

I'm a financial aid counselor (not at your school). Yes, students can absolutely use private loans like Sallie Mae alongside their federal Direct loans. The $5,500 Direct loan limit for first-year dependent undergraduates is often insufficient for total costs. However, I do recommend carefully comparing the terms: - Parent PLUS: Fixed interest rate (currently 6.28%), can be placed on income-contingent repayment if consolidated, eligible for forbearance/deferment, death/disability discharge - Private loans: Variable or fixed rates based on credit score, fewer repayment options, limited hardship protections Most students your son's age will need a cosigner for private loans to get approved with reasonable rates. The financial aid office should provide a comparison sheet of all your options.

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Chloe Delgado

•9M

There's some misinformation here that needs correction. Federal loans do have fixed interest rates, which is an advantage. However, legitimate private loans like Sallie Mae can't simply double your interest rate unexpectedly. They offer both fixed and variable rate options. With variable rates, they can increase based on market indexes, but there are typically caps on how much they can increase. It's important to understand the specific terms of any loan before signing. Many students successfully use private loans as part of their funding strategy when they understand the terms.

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Emily Thompson

•9M

I was having the same problem last month - called FSA like 8 times and kept getting disconnected. I finally used Claimyr (claimyr.com) to get through. It held my place in line and called me back when an agent was available. Saved me hours of waiting and the agent was super helpful explaining how different loan types work together. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ. Definitely worth it for getting answers directly from FSA instead of relying on what your school tells you.

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Connor Richards

•5M

Just wanted to add another perspective as someone who went through this exact situation 3 years ago. My daughter combined her federal Direct loan with a private loan from Citizens Bank, and it worked out well. A few things I learned: 1. Don't just compare interest rates - look at the total cost over the life of the loan. Some lenders offer rate reductions for autopay or good grades. 2. Private loans typically start repayment 6 months after graduation, while federal loans have more flexible deferment options if your son has trouble finding work. 3. Consider applying to multiple private lenders within a 14-45 day window - this counts as one credit inquiry and won't hurt the credit score as much. The key is understanding that you're mixing two different types of loans with different protections. The federal portion will always have better borrower protections, but private loans can definitely fill the gap when Parent PLUS isn't the right fit for your family's situation.

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Fatima Al-Mansour

•4M

This is really comprehensive advice, thank you! I hadn't thought about the autopay discounts or grade-based rate reductions - I'll definitely ask about those when we finalize everything. The point about applying to multiple lenders within that window is especially helpful since we were worried about hurting our credit scores by shopping around. Do you remember roughly what kind of rate reduction Citizens offered for autopay? And did your daughter have any issues coordinating the disbursement timing between the federal and private loans?

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Mia Roberts

•4M

Citizens offered a 0.25% rate reduction for autopay, which might not sound like much but adds up over time. As for disbursement timing, we didn't have major issues but had to coordinate with the financial aid office. The federal loan disbursed automatically through the school, while the private loan required us to submit a certification form to Citizens about 30 days before the semester started. The private loan funds went directly to the school's bursar office just like the federal aid. One tip: keep detailed records of both loan servicers from day one - it gets confusing juggling multiple loan payments after graduation. Also double-check that your school accepts your chosen private lender, though most accept the major ones like Sallie Mae, Discover, and Citizens.

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Christian Bierman

•3M

As someone who works in higher education finance, I wanted to add a few important considerations that haven't been fully covered yet: 1. **Impact on financial aid in future years**: Using private loans instead of Parent PLUS won't affect your son's federal aid eligibility, but make sure you understand how this might impact any state grant programs or institutional aid that consider total family borrowing. 2. **Tax implications**: Interest on both federal and private student loans can be tax deductible (up to $2,500/year), but there are income limits. Parent PLUS loans taken by parents can be deducted by the parents, while loans in the student's name are deducted by the student. 3. **Loan servicer communication**: Once you have multiple loan types, you'll be dealing with different servicers (likely FedLoan or Aidvantage for federal, and the private lender's servicer). Set up online accounts for both and understand their different payment schedules and policies. 4. **Future borrowing capacity**: Remember that your son will likely need loans for all four years. Private lenders may have annual and aggregate borrowing limits that could affect junior/senior year funding. The combination approach you're considering is totally legitimate - just make sure you're planning for the full four-year picture, not just freshman year!

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Noah Irving

•3M

This is incredibly thorough - thank you so much for breaking down the long-term considerations! I hadn't thought about the tax implications at all, and you're absolutely right that we need to think about all four years, not just freshman year. The point about different loan servicers is especially helpful since I can already see how confusing it might get managing multiple payment systems. Do you happen to know if there are any good tools or apps for tracking multiple student loans across different servicers? And should we be concerned about hitting borrowing limits if we go the private loan route for multiple years?

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