Sara Routhier, Managing Editor of Features and Outreach, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming worl...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Mar 15, 2012

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Smart Option Student Loans are a supplement to federal student loans and available from Sallie Mae. They are typically more affordable than traditional private loans, and even carry cash back incentives to students who make consistent and timely payments.

“With the Smart Reward, good habits can turn into cash. By getting into the routine of successful loan repayment early in life, students can build a credit history and are better able to achieve other financial goals such as home ownership,” said Joe DePaulo, executive vice president of Sallie Mae, in a press release.

The Smart Reward the company’s vice president is referring to is a 2 percent cash back reward for students in college that make scheduled monthly payments. Whenever students use their borrowed money to fund school-related expenditures, such as buying gas, eating out, shopping for items online, and other expenditures, they can qualify for additional cash-back rewards.

Another nice perk of the Smart Option financing from Sallie Mae is that any student who sets up an automatic debit payment for their loan will receive an interest rate reduction of 0.25 percent.

Finally, there are no origination fees, no repayment fees, and students can borrow a full 100 percent of their particular school’s certified costs.

In order to qualify for this program, students must attend an eligible school and be enrolled in an eligible program. U.S. citizens who desire to study abroad in an eligible program or who wish to study at medical schools outside of the United States may also qualify for the Smart Option program. International students may also qualify for a Smart Option Student Loan if they have both U.S. citizenship and Immigration Service documentation, and if they have a co-signer who is a U.S. citizen (or permanent resident).

As Sallie Mae suggests, students should first fund their education with any money they’ve saved for college, then turn to federal student loans, and finally when both of those options have been depleted, they should turn to private student loans, such as this Smart Reward option.