I am a 76 year old retired professor. I was not educated in this country and my daughter took out all her own loans for her education in the nineties. So in the last five years with out realizing what I was getting into I co-signed for an educational loans for one of my mentees to get an MFA from a private arts school in California.
One year after graduating this woman disappeared leaving the Sallie Mae to go after me. On occasion this young woman will show up make a payment and/or request economic forbearance (when we harassed her enough) all of which is showing up on my credit rating as well.
Eventually I just locked in a rate and started an automatic payment program rather than waiting for the harassment from SM when they couldn’t find the primary borrower. I co-own a paid off property in New York City with my daughter which I just refinanced to do a debt consolidation so that we could pay of HER educational loans and get her credit up, as well as fix up the house so if we need to sell to get me into an assisted living we would have the capital and she would have the credit rating to take her share and invest in another property.
I would like to use a portion of the refinance to pay off the Sallie Mae loan of this other woman (that I co-signed on) but I am hoping to negotiate for a lower principal, I have received some legal advice that the only way to have any real leverage is to let the loan go into default and then attempt to negotiate. This will of course mess up my credit but as my daughter and I just refinanced and her credit is now up to par I may not be needing the stellar credit I have had all this time.
Should I attempt to negotiate with Sallie Mae before going into default, should I wait and/or is there no hope at all in getting a lower principal.
So nice to meet you.
Sorry to hear you were hurt by someone you tried to help.
The reality is that the way the game is played is creditors typically offer settlements to people that are behind. The reality is there is nothing that requires this to happen but by practice, those better settlement offers seem not to be made available unless the loan is in default.
This is really just a process and policy problem created by the creditor. If this was between you and someone else you’d be able to have a conversation about this early on and work out a solution without triggering certain events.
Considering the fact you will have cash on hand to settle and that a settlement might be a possibility, I think you might be best served by having an expert coach you through this process. Some of the most skilled debt settlement coaches I know who are very affordable are Damon Day, Consumer Recovery Network, Debt a la Carte, and ZipDebt.
Any one of those folks should be able to help guide you through the process. Sallie Mae can be stingy or tricky so a small investment in a debt settlement coach will pay off in the confidence and knowledge you know how to go for the settlement you can afford.
Let me know how it goes for you.
Please post your responses and follow-up messages to me on this in the comments section below.Can You Show Me How to Settle My Sallie Mae Student Loan Debt I Cosigned For? - Alexandra by Steve Rhode