We wrote this article because of the thousands of American's who are seeking forgiveness for their Sallie Mae loans. There are literally hundreds, even thousands of searches daily for forgiveness programs that help lower school? Not to fret, there are programs that can help with this very situation.
Technically there aren't loan forgiveness programs for private student loans but since it's such a highly searched term from people looking for help, we're using it in this article. The programs offered to help lower private loans are debt relief programs that settle debt for a negotiated payoff. These programs can be effective but they are intended for those in default who can't afford their payments and haven't been able to get help from their lender in a restructured payment plan.
Getting a Loan Forgiven is a Real Need for Many People
To find out why Sallie Mae loan forgiveness is in such demand let's look at a little history. Sallie Mae was founded in 1973 and began as a company to service federal student loans. In 1997 they started a mission to become mainly a private student loan lending institution. Why? There's more money to be made by making private loans. Making these loans directly, and not just servicing government loans, was better for Sallie Mae's bottom line.
With the birth of higher interest private student loans came more and more people struggling to pay their college debt. But it wasn't until recently that debt relief companies dealt with and would enroll private loans.
Why then is Sallie Mae in the business of making private loans if they're so much harder to afford than federal loans? Even though so many people seek out help with lowering their Sallie Mae loans., Sallie Mae still makes more money making private ones. How, you ask? Because they also owns Pioneer Credit Recovery, Inc. and General Revenue Corporation. Sallie Mae was not allowed to continue making federal loans but they still service them to this day.
Will Sallie Mae Accept a Lower Amount?
The short answer here is, yes. The federal government does not back private loans like they do federal loans. Therefore, Sallie Mae assumes the full risk for these loans so they are unsecured. The difference when you are dealing with an unsecured loan versus a loan secured by the government is more wiggle room. Federal loans have more options on payment plans but there is no option to get your payoff amount lowered. Private loans can be settled and negotiated for less. Sallie Mae loan forgiveness, as a result, is a very searched phrase.
These loans are not tied to collateral and your tax return cannot be garnished for being delinquent. This means that you, the borrower, has some negotiation room when it comes to obtaining relief from your Sallie Mae loans. The ace in Sallie Mae's hand is they can file a judgement against you. The ace in your hand is this is not a guaranteed way for them to collect on the debt. It can be denied. Also, it cost money for them to file a judgement. If they can reach a settlement agreement without having to file a judgement it's in their best interest.
The How to on Getting a Negotiated Payoff
Just like most everything, Sallie Mae forgiveness has its factors consider. Length of term would be one thing to consider. Often times student loan forgiveness doesn't offer much in the way of lowering payments. What it does offer is getting the client an agreement for a lower payoff. This is why length of term is an important factor. You won't save much, if anything, monthly but you will save a lot on the total payoff.
Even though you'll still have to make payments month after month, a shorter term is the plus side. Less payments. About half as many payments, so it's a big plus. Typically you can knock your debt out in about half the time by going through a forgiveness program. The main thing that will determine this is your outstanding balance when your debt is brought in. The larger the debt, the larger the savings. Sallie Mae loan forgiveness isn't a miracle worker, but it does offer the only realistic solution for some borrowers.
Gaining Relief Through a Sallie Mae Loan Forgiveness Program
Achieving a substantially lower payoff agreement on your own can be hard to do. The one advantage a debt help service brings to the table is the power of numbers. They settle many debts at once with lenders. By settling debts in bulk they get lower settlements. A good and reputable company will pass this savings on to you. They can save you as much as 50% to 60% including their fee.
When considering a company that provides forgiveness services for private student loans, make sure they are reputable. Also, make sure they are easy to deal with. This is important because you will be dealing with them during the duration of the process. The company you choose to settle your loans is the main factor that determines how soon you will get your debts knocked out.
Avoiding the Need of Sallie Mae Loan Forgiveness
Why allow yourself to be in this situation in the first place? The best way to avoid needing Sallie Mae loan forgiveness is by exploring and taking advantage of as many options as you can short of taking out private student loans. Taking advantage of options like scholarships, grants and work-study programs can greatly diminish the out-of-pocket cost of your education.
Explore Federal Loan Options
These are not loans based on your credit and they offer more repayment options than private loans. Gaining forgiveness for federal student loans is easier than getting relief from private ones. Federal loans are typically more flexible in many ways. It's best to only take out private student loans when you've exhausted all other options. Not a full proof plan but all of these options can help you need Sallie Mae loan forgiveness in the future.
Getting Sallie Mae Forgiveness on Your Own
When trying to settle a debt on your own, the best starting place is to get insight from people who have done just that. One helpful article to start with would be 'How I negotiated with Sallie Mae/Navient to save $115K on my student loans'. In this article the author takes you through the process they went through directly with Sallie Mae to get, ultimately, $115,000 forgiven and settled off their debt. This is encouraging to anyone who has the time to try and come to settlement terms with them on their own.
It's not uncommon that Sallie Mae will make you a settlement offer once they know you are struggling, but it may be an offer that is too much in one or more ways. Lets say you are struggling to pay back a $100,000 loan. Let's say your payment is $750 a month and they offer you a settled payoff of $64,000 with $5,000 down and $700 a month for 84 months. This only helps if you can afford to pay $5,000 and a payment of only $50 less than your current payment after that. Sallie Mae loan forgiveness shouldn't only be a negotiation for a lower payoff, but it also needs to be something manageable for you.
Related - How to Lower My Private Student Loans
A Little Reiteration
Like we said in the very beginning, there is technically no such thing as Sallie Mae loan forgiveness. We are referring to it as forgiveness in this blog post because it's such a searched term by someone looking for relief from their loans. Technically the programs offered for Sallie Mae and other private loans are debt relief programs that settle your student loans. This is accomplished through a negotiation process. These type of programs are effective but are intended for those in default and cannot afford their payments and have not been able to get help from their lender in a restructured payment plan. This also applies to those who have not been successful in getting a realistic negotiation offer. A realistic settlement offer would be one that is realistically manageable. It's only effective and realistic if you can afford your payments. If you find you still can't afford your payments, it's back to negotiations.
The Difference Between Private Student Loan Forgiveness and Private Student Loan Consolidation
Private student loan forgiveness and private student loan consolidation are similar in nature but different in structure. They are both used for the purpose of lowering payment, payoff or both. Sallie Mae loan forgiveness is for someone who is severely struggling with paying their loan/loans. Sallie Mae loan consolidation, on the other hand, is for someone who can afford their payments. They may just want to pay less. Maybe they are struggling a little, but not so much they need Forgiveness, just a lower interest rate and payment.
The Future of Private Student Loans
The price of education has risen by leaps and bounds compared to inflation. Private student loans are also going up and they are headed for another interest rate hike. This probably comes as a surprise to most since thousands of borrowers are already struggling to pay their Sallie Mae loans at their current interest rate. The need to get relief from Sallie Mae loans has and is becoming more of a need. Why are they going up then if so many people are struggling to pay them? The truth is it doesn't really affect the bottom line or profit to the private student loan lenders. Since many lenders also own the collection companies the debts go to when someone falls into default, then the majority of what they don't collect directly they will collect through their collection company. The good thing about private student loan settlement is that it deals directly with whoever the loan is with. Sallie Mae loan forgiveness accomplishes this by working out a settlement amount directly with who has the debt. For instance, if the debt is still with Sallie Mae then a settlement is worked out directly with Sallie Mae. If the debt has already gone to collections a settlement is worked out directly with the collection company. No matter who owns the debt, a debt forgiveness company will deal directly with them.
Something to Keep in Mind
An important thing to note about the interest rate hike is that it can raise your rates. This is true even if you already have a private student loan. This will be determined by whether or not your interest rate or rates are fixed or variable. If they are fixed you don't need to worry; your interest rates aren't going to go up. Is your private student loan or loans from Sallie Mae or any other private student loan lender variable? If so, your interest rate or rates will likely be affected. There's no guarantee but at some point, if they have a variable interest rate, they probably will go up.
More Info on the Fed Interest Rate Hike
If you would like more information on the interest rate hike and how it will affect fed loans, then read more about it then read Student Loan Hero's page about what a fed hike means for your student loans.
We Work With Other Unsecured Debts, Not Just Sallie Mae Private Loans
Private student loans is one of our main areas of focus, but we offer forgiveness for other debts. Debt Settlement Consumer offers credit card programs, unsecured bank loan relief, business debt relief, etc. Whether you have many different kinds of unsecured debts or you're struggling with just one, we can help.
Besides Sallie Mae Loan Forgiveness, Navient Loan Forgiveness is Also Highly Searched
Navient and Sallie Mae are not the same company, but are often mistaken as such. Sallie Mae started Navient in 2014 to be the management and servicing side of federal loans and Sallie Mae remained the management side and servicing entity of the private loans. Many people that had loans with Sallie Mae now find themselves dealing with Navient. As a result Navient loan forgiveness has become a popular search like its counterpart Sallie Mae loan forgiveness.
Recent Lawsuits Against Navient
Recently Navient had three lawsuits filed against them for reasons such as: not applying payments properly to accounts, being evasive with information that can help the borrowers maintain or reduce their payments, tricking borrowers to pay more than they should, not properly authorizing the release of co-signers and damaging the credit of borrowers who are disabled. The federal lawsuit filed against them was from the Consumer Financial Protection Bureau. A recent article states a new optimism for the future of private student loan forgiveness which would include, of course, Sallie Mae loan forgiveness. It's worth a read if you have loans with Navient because it goes into more detail about the charges filed against Navient.
Recent Lawsuit Also Names Sallie Mae
Although Navient's legal troubles were greater than its former sister company, Sallie Mae also had a lawsuit filed against them. The lawsuit was filed by the Illinois Attorney General. The lawsuit not only named Navient, but also Sallie Mae. Many of the reasons Sallie Mae got the lawsuit filed against them are the reasons so many of their borrowers are seeking Sallie Mae loan forgiveness. According to Lisa Madigan, the Illinois Attorney General, Sallie Mae was putting borrowers into private student loans they knew would fail. The were subprime loans that are very expensive. Many borrowers who are seeking Sallie Mae loan forgiveness are borrowers who took out a subprime loan.
That's exactly what the State lawsuit is seeking for these borrower who took out a private loan with Sallie Mae prior to 2010, debt relief. They are seeking money for borrowers who have been impacted as a result of their immoral servicing practices.
Another charge against Sallie Mae and Navient is that they have unlawfully charged a 5% fee for missed payments which is more than their actual cost of of processing the missed payments. This is an action that goes against California's Consumer Protection Law that states that the amount charged for a late payment must correspond with the cost involved with processing the missed payment.
Given all these reasons for the lawsuits against Navient and Sallie Mae, it's no wonder the need for Sallie Mae loan forgiveness and Navient loan forgiveness has skyrocketed. Borrowers are struggling to pay their loans as it is, but even more so because of bad business practices from their lenders.
The need for Sallie Mae forgiveness is a real need for many hard working Americans. Chances are this need is not going away anytime soon.
If you find yourself among the thousands of people in need of Sallie Mae loan forgiveness, do you research. There is a whole online encyclopedia of resources and information to guide you in obtaining the relief you need.
On the surface your financial struggle to pay your loans is the same as the other thousands of borrowers. Under the surface the reason you need help is unique. The amount you owe, the type of loan you have, your income, your credit score, etc. can all help determine which route of obtaining relief is best for you. Don't be discouraged, rather, be encouraged to dig until you find the best way to deal with your private student loans.