Latest Posts
Home > Ask The Get Out of Debt Experts > I’d Like to Settle My SallieMae Student Loan. But How? – Jody

I’d Like to Settle My SallieMae Student Loan. But How? – Jody

“Dear Steve,

I’m currently in a chapter 13 bankruptcy that I will make my final payment on in June and will be discharged soon after. I have a Wells Fargo student loan that originated as $25000 in 2004 and was about $35000 with interest in 2007 when I filed.

I’m being told that there’s no way it can be discharged, etc. And I’d like to settle the loan (my parents are willing to give me money). I’d like for this to be for the smallest amount possible. Is this an option? Should I try and get an attorney involved? No one seems to want to touch it because it’s called a student loan….but it’s really just a terrible loan disguised as a student loan??? any help would be greatly appreciated!

Thanks!

Jody”

Don’t miss our free Get Out of Debt – “How To” Guide Series on a number of topics, for loads of practical advice, tips, and help to beat back debt. – Click Here

The Answer

Dear Jody,

Unfortunately SallieMae holds most of the cards here with far reaching powers since it is a student loan.

Your best shot is to call SallieMae directly and start talking about settling the debt. If you eventually get to a point where they make you an offer don’t feel like you need to accept it right then on the phone. Think it over for a few hours or overnight.

The initial response from SallieMae is going to be they can’t do it. Just keep asking for a supervisor and working your way up the food chain.

You will want to get the offer in writing and make sure the agreement says the settlement will fully take care of the total debt since they could otherwise chase you for the balance due.

Since you will probably no longer be insolvent, be aware that the amount of debt they forgive will be taxable to you as if you earned the money. You will owe the IRS tax.

I have heard of a few cases where people have been able to settle but those situations are not common at all and the percentage settled for is much higher than for other debts.

If I had to guess I’d think that in the rare chance they did agree, the final settlement amount will be around 80% of the debt or the $28,000 mark if paid quickly in a lump-sum by a wire transfer.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

Id Like to Settle My SallieMae Student Loan. But How?   Jody
Get Out of Debt Guy – Twitter, G+, Facebook

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

I'd Like to Settle My SallieMae Student Loan. But How? - Jody by

Share This and Spread the Word

About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Antoinette Danner

    Dear Steve, I really need some sound advice. I owe $254 thousand dollars in student loan debt. Currently, I am in the direct loan program which is a federal program for student loans. I was wondering, since it is a federally owned student loan can the loan be settled? If it could, what would be the proper way of settling the loan? How much would I have to pay back? What forms would I need to fill out. Help!

    • http://GetOutOfDebt.org Steve Rhode

      No settling student loans. If you want to pay back for less you’d have to qualify for a reduced payment 20 year program based on economic need. After 20 years the remaining debt would be forgiven.

Get My FREE Get Out of Debt Guy Newsletter

It is the smart thing to do.

I promise to keep your email safe and secure.

Close

I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

You can unsubscribe at any time with just one click.

After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.


  • It will keep you posted on the latest scams.
  • You will be alerted to the latest articles.
  • You will wind up smarter than everyone else dealing with debt.