How to Get Out of Debt With the Get Out of Debt Guy » sallie mae

Sallie Mae – Consumer Complaint – 5-24-2012

Consumer — Thu, 24 May 2012 14:11:29 +0000

Consumer Statement:

In 2004 fresh out of high-school I decided to go to Culinary school in Las Vegas, NV. I took $15,000.00 out in private loans from Sallie Mae. Now going through the years with less glamorous jobs then I’d though I’d have over this time and using all my forbearance and deferment time. Around this passing Thanksgiving time i made several higher payments that I really couldnt afford to become eligible for different payment programs after falling behind. So at the New Year 2012 I apply to be in the graduated payment program with 24 payments at $50.00- thinking hat I now have my foot in the door with a great company etc in two years time I’d be in a better position since I’m not so stupid anymore with some of the srltuff I’ve had to solve (umeployment, near homelessness, illnesses, etc) So, I’m making my payments feeling good about being able to do the best with what I have then in May 2012 a big snag comes up. I am notified that I am months behind and whatnot. I call Sallie Mae to see what is going on and they tell me that I was not in the Graduated payment program and I needed to pay over $600.00 (I make a little more then $1000.00 monthly but have rent, car payment etc) to get current then pay $150.00 appx mthly as my payment. I told them I have the letter hey sent me about being approved and the only answer I got from a payment specialist supervisor was it was an error. I asked how this was my problem and that I wanted to be in the graduated payment program since I was making those payments in good faith to the lettered agreement. He said hat couldn’t be allowed and so I asked about the income sensitive programs they had and what the payments wouldn’t be-—they all were $150.00 or more a month and I can’t really afford that since almost every cent counts. I said that and how it would literally not allow me to eat (ramen and peanut butter is what I mostly eat already) or wouldn’t let me have my car or gas for it (there isn’t a any public transportation by my house I rent a room in or where I work) his suggestion was to not pay rent or my car payment— it made me angry he’d say something like that! All I wanted to do was work something out so that loan would stay in good standing and let me eat.

So how can I get this worked out? Consolidation, Default, etc?

Friends and family that are in the legal field say to just keep paying the $50.00 a month and if goes to court just explim to the judge what happened, but I’ve read horror stories relating to that.

Consumer Action Taken:

I have called and emailed haven’t heard much beyond what I wrote above—I filed a complaint with the counsumer protection bureau but Sallie Mae has stalled them with “requesting more time to determine the situation”

Date This Problem Happened: May 14, 2012

State You Live in: California

Race/Ethnicity: White

Age Range: 21-35

Total Amount of Fee Paid:

Company Name: Sallie Mae

Company Address:

P.O Box 9500
Wilke-Barre, PA 18773-9500

Company Telephone Number: 888-272-5543

Website of Company: salliemae.com

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I Make Hardly Any Money. How Can I Get My Sallie Mae, Direct Loan and Pell Grants Forgiven. – Elle

Steve Rhode — Fri, 11 May 2012 22:00:52 +0000

From How to Get Out of Debt

“Dear Steve,

1. I’ve been homeless and rented “rooms” for the last 3 years. Moved somewhere between seven and nine times.
2. I’ve been mostly unemployed, have had a great difficulty finding jobs because I was a stay at home parent most my adult life, and when I did find work the pay was 8.50 and hour on the average.
3. Was collecting foodstamps at one point and received Medicaid which expired and I never pursued
4. Lost all my possessions because I could not pay the storage bill.
5. Went into a chapter 7 bankruptcy a year ago in January. So that would be 2011
6. Had two short term jobs that I was fired on bogus terms from over the last six months. Currently unemployed and seeking work.
7. Have not earned enough to be required to file taxes in at least three years.
8.I have a 22 year old in college and a 17 year old and they both could use my financial assistance.

I graduated college with my BA with a concentration in Psychology and Communications. last week. I’m worried that because of the economy I won’t find work. I owe money to Sallie Mae and to Direct Loans and for Pell Grants. Do I qualify for loan forgiveness? What can I do, if I don’t?

Elle”

The Answer:

Dear Elle,

I think a number of the links in the resource section below will help to answer your Direct Loan and forgiveness questions.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

Student Loan Resources

You can use the following student loan resources to help reorganize, discharge or forgive your student loan payments.

Student Loan Forgiveness and Discharge Information

Student Loan Consolidation Information

Student Loan Petition

Private Student Loan Help Needed. Pass the Fairness for Struggling Students Act. Sign the Petition Now.
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.

Sallie Mae is Threatening to Garnish My SSDI Income. – Trudy

Steve Rhode — Thu, 03 May 2012 20:03:46 +0000

From How to Get Out of Debt

“Dear Steve,

A few years ago I co-signed two private student loans for my son through Sallie Mae. I am disabled and receiving SSDI. My son has now defaulted on the loans and Sallie Mae is demanding payment from me. The loan is now with a collector who is threatening judgement. I live in the state of Hawaii. My son also lives in the state of Hawaii and has a good job and Sallie Mae is aware of this but they continue to threaten me and not him.

I am currently unemployed and receive SSDI payments for disability. From my own research I’ve learned Sallie Mae can not garnish my SSDI but can Sallie Mae freeze or garnish my bank account? The only monies going into my bank account are from Social Security.

Thank you for your help.

Trudy”

The Answer:

Dear Trudy,

Your assumptions appear to be correct. Since the money in your bank account is from public benefits you should be what people call “judgment proof” since these are private student loans. If they were government subsidized your benefits could be garnished.

You might want to contact the Legal Aid Society of Hawaii for free legal help on this matter.

Typically the lender will pursue the co-signer because that person usually has better credit and resources than the primary account holder. I would not be surprised to see them pursue your son once they run into a wall with you. Which begs me to ask, why isn’t your son paying on these loans if he’s doing alright?

There is nothing that prevents your son from contacting Sallie Mae and working out a repayment plan to prevent you from being sued.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

Private University Said I Had a Full Ride Scholarship But Now I Have Sallie Mae Student Loans. – Ryan

Steve Rhode — Mon, 26 Mar 2012 13:18:52 +0000

From How to Get Out of Debt

“Dear Steve,

Hello I am Ryan, a recently graduated college student, and I just found out that I have $12,500 dollars in student loans.

When I was first starting college for my BS in Business Administration the dean promised me a few things. First, he promised that the universities career placement program would place me at an entry level management position. Second, he promised that the free ride he was offering would cover all expenses and cover my entire financial aid package. Neither of these things turned out to be true.

My freshman year of college I had my full ride and got a $12,000 dollar scholarship on top of that. I saw none of that money. My sophomore year I had to take out student loans to pay for books and tuition, but I was assured by the people in the financial aid office that I wouldn’t have to repay the loans due to my scholarship. Well that was a lie. I also took out loans junior and senior years, although I didn’t see any penny of my junior year loans until my senior year because the school failed to get the checks to me. Luckily I had worked during the summer and could pay for their random expenses until my free ride student federal loans kicked in, and I got my money back.

I graduated July 22nd, and was not placed into any career at all. Only towards the end of my Junior and Senior years did I get any kind of help from Career Services. Their ‘help’ consisted of practicing for interviews and writing resumes. I once told the career counselor that I would like to look into getting a job that I wanted or would like to be doing, and he basically told me that’s not how it works I need to do whatever they found for me and work my way up because it is a rough job market. Guess what, after graduation I was out of sight out of mind.

I moved back home with my father in order to cut down expenses until I could find a management job or any job that I would like doing. I done a few internships but nothing worked out. I didn’t work for about 8 months, but I was actively looking for good career opportunities and applying to many places. Now 8 months later I have received a notice from SallieMae. They claim that my student loan is more than 60 days delinquent. They claim my past due amount is about $500, and that I should contact them to start paying. This was a huge shock! I don’t have any written proof of my scholarship that was never paid or of the university promising to pay all of my student aid through the full ride. When I talk to the University they claim I have to repay student loans, that my full ride only covered tuition, and that my scholarship or loan checks are too old for the school to remember and I’d have to ask the other party about them.

I am hesitant to call SallieMae to work out a repayment plan because I don’t want them to default. The notice they sent includes a default date, and I’m not sure pushing a default forward would be the best choice of action.

When I got this letter from sallie mae I first freaked out, then I denied it, then I was angry. But I finally forgave the university and realized that I would have to live with the consequences of this. In fact some of it was attributable to my own ignorance and blind trust. So I ran out and got the only job I could find, a part time cashier at wallmart making minimum wage. My current plan is to live at my father’s place and work and just pour as much money as I can possibly pour into paying off these loans. I never would have taken a loan had I known I’d have to repay it, that is against my religion. Now that I know I have one I’m into panic mode, gonna do whatever it takes to get the loans paid off.

I have a couple thousand saved in the bank, this was my fall back and real life happens fund. It could be mostly shoved into a loan though if that’s wisest.

The loans are as follows according to the notice I received: 3500 at 6% FFELP. 4500 at 5.6% DLSUB. 4500 at 4.5% DLSUB.

It was a Private University, if that makes any difference.

30 year repayment forgiveness, deferred payment with interest piling up, getting deeper into debt is not a plan of action that I wish to go.

I got here by not being very smart, and just having a vague plan like work and throw all my money at it isn’t really inspiring any confidence.

What exact and specific plan should I follow in order to get out of this debt, or what resource can I use in order to form an exact and specific plan for myself?

Ryan”

The Answer:

Dear Ryan,

The first step is for you to call Sallie Mae and then report back here. Not calling them doesn’t change anything and we need to know what the situation is to come up with a game plan on how to deal with it.

If you don’t call them and don’t get on the same page as them they are simply going to do whatever their computer screen says and you don’t want that kind of surprise.

Get the facts and we can decide what to do next.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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’m Drowning in Interest Only Salle Mae Payments

Consumer — Sun, 18 Mar 2012 16:12:28 +0000

From How to Get Out of Debt

I have three private loans with Sallie Mae the first one is 13.25% and the other two are at 10.25% I’ve been paying them since 2006. I was unable to consolidate in 2006, 2007, 2008, 2010, 2011. I’m at a point were I can only afford interest only payments nothing towards principal because I can’t afford it with rent and my other bills. I don’t have any credit card debt and my credit rating is “fair” on the boarder line of good. I did have a bankruptcy in 2005 on CC debt and since then, I’ve reestablished myself racked up CC debt on purpose and just paid off $7,600 to boost my credit scores. I’ve tried wells fargo, Chase banks and no one will consolidate these loans because they are making so much money off me. I’m stuck, I can’t even get a home until these private loans are paid off. I dont know what to do Steve. I’m drowning. I just want to pay off the debt and be free and stop interest only payments. I need HELP please!

Who can I reach out to for consolidation help on variable loans I have three and I can only afford interest payments ever month to keep my head above water.

This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

Who Can Sallie Mae Get Away With Not Following Direct Loan Rules?

Consumer — Thu, 29 Dec 2011 18:12:14 +0000

From How to Get Out of Debt

I am confused on how Sallie Mae gets away with this.

My Sallie Mae loans is considered a private loan, so why am I unable to declare bankrupt on it?

If they are a true school loan then won’t they allow me to have income based payback option?

Why don’t they have to follow the same rules as Direct Loans? So which are they student loans or private loans?

Leah

I want help to sort through all of it and don’t know where to turn. – Whitney

Consumer — Thu, 22 Dec 2011 13:24:16 +0000

From How to Get Out of Debt

I am 32 mother of two and was just let go from my teaching position.

My question revolves around financial aid. I feel like I can’t find any information about how to handle my financial aid debt.

I want to find a credit counselor to help me consolidate my loans but am having no luck finding one that I trust or that can help me.

When I took the loans out I was young and totally unrestrained and now am paying for that. My problem is that I kept horrible records, I transferred schools and have lost track of who I borrowed from, how much I borrowed, etc… I know some of my loans are with Sallie Mae, but otherwise I don’t know.

I want help to sort through all of it and don’t know where to turn. I am thinking of going back to school for my Masters but am scared of the debt since I am so uneducated about my undergrad debt.

My question is who can I talk to find out about my debt? How do I consolidate? How do I get in control of this debt? It has been 3 years since I graduated and even when I was in school, my financial aid office was no help when I asked these same questions. So I don’t feel like I can turn to them. Any advice or help would be so greatly appreciated! Thank you so much!

Whitney

Is there a way to get student loan forgiveness if I became disabled during my last year in school? – Jade

Consumer — Wed, 21 Dec 2011 02:44:39 +0000

From How to Get Out of Debt

I have an autoimmune disorder called Lupus, and during my senior year in college, I had a massive flare-up that hospitalized me for 7 months, to the point where I needed chemotherapy!

I was released, but suffered from Transverse Myelitis, which is a neurological disorder, caused by inflammation of the spinal cord.

I now struggle to walk, suffer from incontinence, and have shoulder problems from relying heavily on using a walker. It has been 3 years since my hospitalization, and it is always a daily struggle for me.

However, the people working at Sallie Mae had no sympathy for me, and was even asking me to make payments while I was in the hospital; even insisting that I ask family members, such as aunts and uncles if they could pay in my behalf!

Is there any place/organization that offers student loan relief or help paying it off for a person in a situation such as myself? I don’t see my recovery progressing significantly anytime soon, but my debt interest continues to accumulate. I have been paying off what I can with the small amount of SSI that I get monthly – any financial help out there would be greatly appreciated!

Jade

I Have Salie Mae Loans That I Need to Stop From Defaulting. – Kristen

Consumer — Fri, 16 Dec 2011 20:20:54 +0000

From How to Get Out of Debt

I have about 48,000 dollars in student loans from Sallie Mae. I tried a bit ago to lower my payments or get some sort of relief from them–to no avail. Of course I began missing payments, so it’s been a year and now they are attempting to default and garnish my wages (I just got the call about an hour ago). I know that this will ultimately lower my payments (albeit against my will) but I hate that this has to happen to my credit. They were no help at all to me. My father passed away about 7 years ago, a year after I started college. My mother broke her foot a few years back and cannot work. I only have my sister and my grandmother and neither of them are in a position to help me financially. Essentially, I am on my own with this and I feel gipped. I have literally 5 classes left before I graduate college, after spending 8 years trying to get my Bachelor’s, working full time all the way through, this is what I get for it. I was also t rying to get a nursing certification once my last semester was up, but now I am not even sure I can get any more financial aid because of this default.

Will I still be able to stop the default in any way? If they default me, am I still able to get federal loans from anyone?

I’m currently backed-up on answering questions so I’m posting some of the questions here for you to help answer.

This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

@GetOutOfDebtGuy

Should Colleges and Universities Be Held Accountable for Private Student Loans They Pushed?

Steve Rhode — Sat, 03 Dec 2011 16:05:16 +0000

From How to Get Out of Debt

“Dear Steve,

I’m 28 and graduated from a private college in 2007 with a Bachelor’s Degree in English. Im about 80k in debt and making $9.25 an hour as a daycare teacher. I am married; my husband makes $11.00 an hour. We have a two year old, rent a house, in the hood, for $600 a month, make too much for government assistance and drive a 20 year old car (we only have one car). Sallie Mae will mot lower my payments, Great Lakes and Keybank are about to seize my wages. I sd ont know what to do. We live paycheck to paycheck, we are scraping by to make ends meet. Ive looked into Bankrupcy, but have learned it doesnt erase student loans. I see no end in sight and feel overwhelmed by these loans. Sallie Mae and Key Bank are the worst and wont let me do income sendsitive repayments and even had the audacity to tell me I should cut back on groceries for my family. They feel I dhould be paying 250 a month. If I were making the minimum payments on my loans I d be paying around 600-700 a month. We only bring in 2400 a month, we just cant afford that!

Any suggestions?

Jeannie”

The Answer:

Dear Jeannie,

If these are private student loans and not government backed student loans your options are limited unfortunately. Private student loan debt is a generation robber. It saddles people with debt that can’t be discharged in bankruptcy, can add a huge collection penalty and can administratively garnish your wages without going to court. As far as I’m concerned it was always a trap.

It would be interesting to see the colleges that pushed private student loans as a way to sell classes and generate income, be responsible for this mess they profited from and helped to create.

If your loans are government backed then you have some good options including possible loan forgiveness and the Income Based Repayment (IBR) program.

For now, private student loan debt is a tragedy without a solution.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

Georgetown University With Old Student Loan Debt

Steve Rhode — Mon, 28 Nov 2011 17:20:32 +0000

From How to Get Out of Debt

“Dear Steve,

Georgetown University professor with $11,000 balance with Sallae Mae dating back to 1993–so I am beyond the 20 year period.

Do I qualify for debt forgiveness for the balance?

Daniel”

The Answer:

Dear Daniel,

Am I safe in assuming these are private student loans and not government backed student loans?

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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’ll Pay 36 Years on My Student Loan Debt. Will the Obama Student Loan Program Help? – Sandra

Steve Rhode — Mon, 28 Nov 2011 14:07:59 +0000

From How to Get Out of Debt

“Dear Steve,

I’m 47 years old and have been paying back my student loan for 24 years. At some point, I consolidated my loans with Sallie Mae. It’s categorized as UNSUB; however, I’m pretty sure some of the loans were, in fact, subsidized… but I guess that’s irrelevant. There have been times I’ve gone into forebearance but generally speaking, I’ve been paying this loan off for 24 years and won’t be done with it for another 12. The original priniciple balance was $24,244. After having been paying for 24 years…. with interest, my balance is now $33,896.

Granted, now …. I can actually afford the loan payment but there have been times I have struggled… most of those 24 years, in fact.

Given the status of UNSUB of my Sallie Mae Loan and the fact that I can afford the payment affect my potential of qualifying for the ’20 year forgiveness’ portion of Obama’s plan? I have also been working for a nonprofit for 8 years.

24 years and the loan is still 10K MORE than what I borrowed.
12 more years to go.

Anything that’s changed for student loans over the past years….I haven’t qualified for because I consolidated. The changes have always been aimed to help new borrowers.

Can I look forward to forgiveness and being able to free my life of this debt?

Sandra”

The Answer:

Dear Sandra,

The first thing I’d suggest is that you contact the Federal Student Aid folks here and ask them to check to see if any of your loans do have a subsidized status. In that case you may be eligible for current programs.

However, even programs like the Income Based Repayment (IBR) program, which is similar to the proposed Obama student loan program, only eliminate your debt after 20 years ON the program.That would not be much help to you.

If your loans are government backed you could be eligible for the Public Service Student Loan Forgiveness program.

Eligible loans include Federal Direct Stafford Loans (Subsidized and Unsubsidized), Federal Direct PLUS Loans, and Federal Direct Consolidation Loans. Borrowers in the Direct Loan program do not need to consolidate in order to qualify for loan forgiveness. Borrowers in the FFEL program will need to consolidate into Direct Loans.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

How to I Get Obama Student Loan Help for My Sallie Mae Student Loans? – Jo

Steve Rhode — Sun, 27 Nov 2011 02:25:27 +0000

From How to Get Out of Debt

“Dear Steve,

I took out a student loan–a federal loan–in 1991 for $6000 at 8%. Due to a long series of financial setbacks, unemployment, a divorce, yada, yada–I now owe over 13K and it’s 20 years later. My loan now belongs to Sallie Mae. I am a single woman, 51 years old, no kids in CA with an income of about 20K a year

Does the new Obama plan for loan forgiveness after 20 years apply to me? If not, is there another program for debt forgiveness that would? I am not able to change careers to one that gives forgiveness as listed in the Dept. of Ed.

Jo”

The Answer:

Dear Jo,

I would seriously be against any government program delivering any assistance for Sallie Mae private student loan help.

When it comes to private student loans your only options lie with the servicer.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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 Missed my Sallie Mae Student Loan Payment. Can They Lower My Payment? – Jo Alice

Steve Rhode — Wed, 09 Nov 2011 16:51:54 +0000

From How to Get Out of Debt

“Dear Steve,

Got loan from Sallie Mae – private student loan

I have not been able to paid my student loan since the monthly due amount is higher than expected (almost my whole paycheck)

My account is in default right now. I have several loans from them-different amounts. Some of them are in a collection agency… HELP!

Where should I start? Collection debts first? I have tried to call Sallie Mae to lower my payments and they can do what I can pay. Their suggestion was to let the loans be in default so a collection agency will take place and they can give lower payments… Do this sound right??

HELP I’m clueless!!!

Jo Alice”

The Answer:

Dear Jo Alice,

Sallie Mae and other private student loans have limited options for making the payments affordable. Government backed loans have lots of options.

The place to start on this would be with the servicer or collection agency contacting you. I would not be in favor of an intentional plan to default on the loans. The penalties for defaulting, including the potential for an administrative wage garnishment as severe.

If you are struggling to make the payment, even though your options are limited, reach out as early as possible to investigate your options.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

My Sister Died and Owed Sallie Mae. My Other Sister Co-Signed. – Arthur

Steve Rhode — Mon, 07 Nov 2011 19:51:30 +0000

From How to Get Out of Debt

“Dear Steve,

My sister (Annemarie) had a Sallie Mae Loan in the amount of around 78,000.00 dollars for education. My younger sister (Diane) co-signed the loan. On 16 May 2011 my sister Anne passed away. I sent a Certificate of Death to Sallie Mae, thinking this would clear the debt, instead they assigned the debt to my younger sister who barley earns above minimum wage. Diane cannot repay this loan. As much as I would love to offer an explanation for how she reached this point. I am dumbfound because, I was not aware this occured. I am only trying to research and help my younger sister out. Bankruptcy says, this is not an option.

If the primary of the Sallie Mae loan passes away and the co-signer cannot repay the debt. can it be dismissed?

Arthur”

The Answer:

Dear Arthur,

I’m sorry to hear about the passing of your sister Annemarie.

As if to add more tragic news to your tragedy, a co-signer is wholly responsible for the debt if the primary borrower can’t pay. And because this is a Sallie Mae loan rather than a government backed loan the only repayment options that are available will be through the current servicer.

At the time your younger sister agreed to co-sign I doubt she ever would have predicted this eventuality. Did Annmarie have any life insurance that could pay off the loan?

You may want to contact Sallie Mae and ask directly is Annemarie took out life insurance directly against her loans. Sallie Mae does offer such products through outside relationships.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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 Went to a Private University on Sallie Mae Loans. I Can’t Afford the Payment. – Aline

Steve Rhode — Mon, 19 Sep 2011 22:50:13 +0000

From How to Get Out of Debt

“Dear Steve,

I went to a Private University and took out a loan from Sallie Mae. They are asking me to pay back almost $1,000 a month … money i physically do not have and cannot afford to give. I told them i was willing to pay $300 a month, while it would still put me in a difficult financial situation, that is what i could afford based on my rent and other bills. They said the lowest they would take from me was $720 – still does no help. They said if i sent them $300 a month that it would still show past due and it would be reported to the credit bureau which really defeats the purpose of sending the $300 a month.

Do i have any options – sallie mae is telling me that i cannot do $300 a month its the $720 min or nothing. is this possible? how can they not offer any other assistance? i am trying to see who in sallie mae can make the decision to make an exception to allow me to pay the $300 for a year or 2 monthly and then increase the payments as i bring in more income.

Aline”

The Answer:

Dear Aline,

I’m sorry to say, your options are limited at best.

Since Sallie Mae is not a government backed lender none of the special graduated repayment programs apply to you. Sallie Mae makes no special programs available and only what you can work out with the servicer is the extent of your options.

Private student loan debt is the worst kind of debt to have these days since it can’t even be discharged in bankruptcy.

I know that information isn’t what you are looking for but it is what it is.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

What Government Grants or Student Loan Forgiveness is Available for My Sallie Mae Student Loans? – Trina

Steve Rhode — Sun, 18 Sep 2011 17:46:05 +0000

From How to Get Out of Debt

“Dear Steve,

I am 41 years old. I started repayment on consolidated student loans through Sallie Mae 15 years ago. They have been sold to a different company at least once, I have deferred them several times but have never paid more than minimum amounts. I have mostly worked part time over the last 13 years due to having kids. I lost a full time job about a year and a half ago and am now back to working part time.

Is there any relief assistance available for me besides volunteering though Americorps or joining the National Guard? (the only two viable things I’ve seen in my search on line)

Are there Government Grants available? And how do I research finding them? or are there “Forgiveness” programs, and again, how do I go about finding them? Thanks for this great website! I hope you may have some helpful information for me :)

Trina”

The Answer:

Dear Trina,

When it comes to Sallie Mae students loans, I’m afraid the news is not wonderful. There are no government grants to repay private student loan debt.

If you have Federal backed student loans there would be much better options. But you don’t, rats.

The AmeriCorp Financial aid to repay student loans is only applicable to loans backed by the federal government under Title IV of the Higher Education Act (except PLUS Loans to parents of students), or under Titles VII or VIII of the Public Health Service Act. You may also use your AmeriCorp (Segal Education Award) to repay a student loan made to you by a state agency, including state institutions of higher education.

Unfortunately it looks like your Sallie Mae loans would not be eligible at this time, Segal Education Awards cannot be used to repay any other type of loan, even if the loan was obtained for educational purposes. – Source

The National Guard on the other hand has the Student Loan Repayment Program (SLRP) that does not appear to have the same restriction as AmeriCorp.

For Soldiers and officers who have an existing student loan obligation at the time of enlistment in the Guard, the Student Loan Repayment Program (SLRP) may pay up to $50,000 for certain jobs, with a six- or eight-year enlistment as a member of a unit.

In addition, current Guard members who extend their enlistment contract for a minimum period of six years are also eligible for this program, provided they meet certain requirements, including a qualifying score on the Armed Forces Qualifying Test and being in a valid Military Occupational Specialty (MOS) in a National Guard unit. – Source

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

How Can I Settle My Sallie Mae Student Loan Debt? – Roxanne

Steve Rhode — Sun, 11 Sep 2011 19:07:06 +0000

From How to Get Out of Debt

“Dear Steve,

Have consolidated Federal Student Loans in 1999. Was locked in at 7.5% interest rate. One of these loans is a Federal Subsidized and other is Federal Unsubsidized.

I have been current on my loans and my balance is over 80,000. I would like to know how I can get them to take a discounted payment in order to pay off my balance in full. They told me that since these are Federal Loans there is not discounted payoff available.

My loans are in process of being transferred to Sallie Mae. Can you tell me how I can offer an amount that is less than the full balance due that they may settle on?

Roxanne”

The Answer:

Dear Roxanne,

It is unlikely they will entertain any settlement offer. There is no reason for them to settle for less since they have the full power of the law behind them if you don’t repay your contractual amount due.

If you fall delinquent they can add a big balance as a collection fee, intercept your tax refunds, report you delinquent on your credit report, and garnish your wages.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

Sallie Mae is Garnishing 15% of My Wages. – Derek

Steve Rhode — Tue, 28 Jun 2011 20:53:58 +0000

From How to Get Out of Debt

“Dear Steve,

I graduated college in 2007 with a mountain of student loans. I had three sets of loans, one large chunk through Sallie Mae amounting to around $52k, and two private loans amounting to about $10k each.

I had an agreement with Sallie Mae to defer those loans for a year after they were up for repayment and I started paying off about $100 each on the two 10k loans. After a year, Sallie Mae and I agreed again to defer my loans.

Heading into the middle of 2009, Sallie Mae suggested that I consolidate all of my loans with them, which I went through the process. They advised me to wait until late summer of 09 for a better possible interest rate, which I took their advice.

When I went to pull the trigger on this consolidation, they advised me that they no longer do loan consolidation, undoing all of the planning that I had for months. What was worse, is when the deferment came up again, they refused to make any arrangements for me for possible deferment or repayment and requested one of two options: a monthly payment of around $800 per month, or the entire $52k in whole.

Neither of these options were a possibility to me as I have about $200 in expendable income each month. After arguing with them for several months, my Sallie Mae loans went into default. I hated having them go into default, but I had no choice as they would not deal with me. Every month, I got notices of default in the mail and I begun to respond to them with the same situation as I was in.

Eventually, they just stopped. Fast forward to 2011. Last week, I got a notice in the mail from GC Services saying that they were requesting repayment of these loans and then my employer was contacted by both GC Services and ECMC in regards to a 15% wage garnishment. My situation has not changed over the years. I still have around $200 of expendable income per month and make about $100 in monthly payments to my other two loans.

My big question: What should I do? I totally admit and acknowledge that I defaulted on my Sallie Mae loans. I didn’t expect Sallie Mae to hamstring me like they did and give me basically zero acceptable options. I’d love to be able to pay off these loans, but if they take the 15% out of my wages, that’ll take all of my expendable income, but take a chunk out of my normal funds as well and after crunching the numbers, I’m going to lose in the end and won’t be able to make any monthly payments on my bills.

What options do I have? I have not yet contacted either GC or ECMC directly to attempt any arrangements, but everything that I have read about this company advises me to be careful as they can be extremely harsh and use unfair tactics.

Any and all advice would be greatly appreciated!

Derek”

The Answer:

Dear Derek,

I wish I had better news for you but student loans are nasty and private / Sallie Mae student loans are the worst.

Yes, Sallie Mae pulled their consolidation program when their funding dried up.

And student loan lenders can go for an administrative garnishment of 15% of your income after taxes and FICA. The only way to avoid that garnishment is to negotiate a mutually acceptable repayment plan directly with Sallie Mae. If you can negotiate such a repayment plan you can get your loans current again and after 12 consecutive payments the negative past history on the loans should be removed.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

Can Sallie Mae Garnish My Social Security? – Pam

Steve Rhode — Sat, 25 Jun 2011 16:26:50 +0000

From How to Get Out of Debt

“Dear Steve,

I have no taxable income I receive VA compensation for being 100% disabled and Social Security can these benefits be garnished for the debt, and if so once my benefits are garnished am i stuck paying forever and this kid gets away scott free? Do I have any options, like suing him or his parents in civil court?

Pam”

The Answer:

Dear Pam,

Ironically I just had a similar question from Heather. See I Took Out a Student Loan for My Stepson. Stepson and Ex-Husband Refuse to Pay It. – Heather.

Well the good news is that since this is not a government loan Sallie Mae can’t garnish your Social Security.

You can certainly file suit to attempt to recover payments that were promised to you by the other party if you have some sort of proof they agreed to pay. Please talk to a local attorney about your situation and suing.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

Sallie Mae Wants Loan payments to Start Before My Daughter Leaves College. – Jeff

Steve Rhode — Sat, 25 Jun 2011 16:07:53 +0000

From How to Get Out of Debt

“Dear Steve,

My daughter is still in college 4 years she has not completed her nursing degree and is switching degree over to social services, the problem is sallie mae states her $19,000 student loan is due for repayment, I understood that aslong as she is in college that student loan payments are deferred for 6 months after you complete college and then go into repayment? I read the MPN and it does state this, why all the harrassing phone calls wanting repayment to start? I appreciate any advice you can give me.

Sincerely

Jeff”

The Answer:

Dear Jeff,

What does the loan servicer say when you ask them that question?

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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 Went to Helicopter Flight School and Can’t Afford My Student Loans – Shane

Steve Rhode — Sat, 25 Jun 2011 15:23:54 +0000

From How to Get Out of Debt

“Dear Steve,

I went to helicopter flight school and finished in 2007. I have not been able to find a job flying and struggling to pay my bills. My wife left me leaving me with the house and it is 50k underwater. I owe Sallie Mae about 125k in private loans.

Is there anyway to file chapter 7 or something I can do. I can’t afford to make the payments on my house and my student loans. These are the only 2 debts I have. Besides my child support.

Shane”

The Answer:

Dear Shane,

I’m afraid that when it comes to private student loans there are no options other than what the servicer can offer you. If they were government student loans then you’d have some good options.

Unfortunately bankruptcy can’t discharge student loans.

The only option would appear to be to abandon the house, find a place to rent that is cheaper and then file bankruptcy to break the bond to the mortgage debt. Hopefully that will leave you with enough room to make the child support and student loan payments.

As a pilot myself, I wish I hand a magic wand to get you back in the air.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

Sallie Mae Wants to Garnish My Wages – Brandon

Steve Rhode — Thu, 16 Jun 2011 17:56:06 +0000

From How to Get Out of Debt

“Dear Steve,

I owe sallie mae $103,500.00 and have paid them $3600.00 for 3 years on the interest but the loan still stands at the same amount. I have a private and a federal loan both equalling to the above amount. I’ve ran into the same problems as everybody on this site that deals with sallie mae which is they just put you in forberance.

It seems there is no help for loans anywhere and that to me is sad being everybody else can be helped but striving young people who only want to better themselves. I went to school for animation but can’t get a job due to tech issues with finding programs that are $6000 themselves.

So I’ve been getting them bootleg and it’s sometimes hard to come by. Also my computer took a crash so now I need a new one but can’t afford due to other hardships. I work a dead end job but still am able to get by but the loans still stand at the same amount…

My question is would it be better for me to just let sallie mae garnish my wages? If I can’t pay what they want which is $1100 every month then should I let a judge tell them what amount they can charge me based on my income and expenses?

Brandon”

The Answer:

Dear Brandon,

Unfortunately when it comes to Sallie Mae there are no great options. Faced with a minimum payment of $1,100 or getting your wages garnished, the garnishment will most likely be much smaller. It’s not a perfect solution but at least it is a mandated payment based on disposable income. The formula for calculating the garnishment will be based on the rules of the state you live in.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

How Do I Deal With Sallie Mae When Bankruptcy is Not an Option? – Debbie

Steve Rhode — Tue, 31 May 2011 21:24:12 +0000

From How to Get Out of Debt

I have $125,000.00 in debt with Sallie Mae Servicing Center, I have been with them for years, but with their high interest rates and principles, I will never pay this off unless I win the lottery.

I tried to get loan forgiveness they denied that saying my loan was before 1998. I did not get my teaching degree until 2005 and was teaching for the KCMO School District and MCC Penn Valley Junior College in an urban core and still no help.

I feel stressed and overwhelmed because it is a bill I will never get help for unless a miracle happens, can you help and give me some information that may get them off my back. I have emailed President Obama to help people due to the economy who have over 50,000 in debt pay off half and we pay the rest or if we have paid over ten years to remove this debt and give us a break of relief.

Something has to give, I heard even Suze Osman friend of Oprah was working on this issue too.

Please email me what you know and thanks in advance for your help.

Do you have any information to help someone who has a loan with Sallie Mae and wants relief because bankruptcy is not an option?

Debbie

I’m currently backed-up on answering questions so I’m posting some of the questions here for you to help answer.

This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

@GetOutOfDebtGuy

My Ex-Wife Was Supposed to Pay Her 100K in Student Loans. I Can’t Find Her. – Patrick

Steve Rhode — Sat, 28 May 2011 15:57:49 +0000

From How to Get Out of Debt

Got married in college…wife and I consolidated student loans through the Devil (Sallie Mae). We got divorced…my name is the primary on the consolidation account.

I am buried in excess of $100,000 in student loan debt that my ex-wife and I borrowed in college. When we got divorced she was required to pay her portion in accordance with the divorce decree.

She moved out of state, and I have no idea where she currently resides. I have been paying the $750+ monthly payment for years now. (I just checked today, and I’ve paid over $62,000 towards the bill and knocked the princial down about $10,000) I’ve been at the same job for about 11 years, and worked my way up to a decent wage to where I was able to make the payment and still afford basic living expenses. (I am currently remarried and have 2 children)

My current wife makes decent money as an RN, and we are getting by. Unfortunately it appears that my job may be in jeopardy, and we can not afford our house payment (it’s a modest 3 bedroom house with a payment of about $600 per month) and my $750+ student loan payment. I’ve asked for years what kind of action I can take to pursue payment from my ex-wife to help soften the blow on this, and I always get the same answer…take her into court on contempt charges…the problem with this is…I have no idea where she lives.

In addition Sallie Mae actually told me they couldn’t care less if she ever paid a penny, because I’m the primary on the loan, so as long as I pay them I’m happy. When I asked for there advice on how to get her to pay too, the gentleman I spoke to suggested I kill myself, then she would be responsible for the loan. Any suggestions on what to do about this mess?

Thanks

Patrick

I’m currently backed-up on answering questions so I’m posting some of the questions here for you to help answer.

This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

@GetOutOfDebtGuy

I Cosigned for Student Loans for a Friends Son. How Can I Get Out of This? – Pam

Damon Day — Sat, 14 May 2011 15:17:13 +0000

From How to Get Out of Debt

“Dear Damon,

Cosigned for student loans for a friend of mine son since then she been laid off and it was more than a yr after the son graduated before he found a job. Sallie Mae has been coming after me hard for this debt, I lost my home in 2010, also filed bankruptcy the same year. The friend is saying they cant afford the amount Sallie Mae wants as monthly payments and when I call they give me little to no information on the account because I’m only the cosigner yet they continue to send me threatening letters demanding full payment. I’m on a fixed income so my ability to pay is quite limited, didnt foresee the loss of job situation when she came to me and asked me to do this.

Is there any way humanly possible to have my name removed from these loans?

Pam”

The Answer:

Hello Pam,

Unfortunately there isn’t and this is why cosigning is so bad. Now you have the burden to carry with this and it isn’t fair. So for anyone reading this, do not ever co sign for a loan unless you are fully prepared to pay it in full. If you are not prepared to do that, then you must decline.

Pam, you need to go to your friend and have them step up. You help their son get a loan for education and now they need to be the one to make the sacrifices to make good on the payments. Have your friend look into the Income Based Repayment (IBR) to see if he can qualify for a low enough payment for him to make it. He should be out there mowing lawns and doing side jobs to cover this.

I would start with your friend, and see what happens there first.

Damon is a talented independent debt coach that provides in-depth assistance and consultations for people struggling with debt. If you want a personal debt coach to help you through a difficult situation or want assistance to find secret discounts offered by debt settlement companies I think Damon Day is an excellent person to contact for advice and assistance. He can be reached directly at DamonDay.com

If you have a debt related question you’d like to ask, just use the online form.

How Does My Husband Get Back His Tax Refund as an Injured Spouse? – Regina

Steve Rhode — Fri, 06 May 2011 02:58:39 +0000

From How to Get Out of Debt

“Dear Jim,

I have lived in Phoenix arizona since 2003. Attended college in 2003 took a LOA went back in 2005. Have not had any income since 2003. I Was not able to complete course (I know has no bearing). I have been married for four years and I do not work and have no intention of working. I do not have my name on any bank accounts or property. We have no joint accounts or holding of any kind. All bank accounts were well established prior to our marrage and no modifications have been made to any of those accounts. I have disputed the amount shown that I owe. I have disputed the amount since the first payment demand. When I asked for information regarding arbitration Sallie Mae refused to provide me with the information unless I called them. I had previously informed them that all dealing were to be though e-mail or postal mail I did not call for the information I was asking for. I tried to file for a deferment or forebearance and was told I would have to make a good faith payment in order to be considered for either of those options. I have made no contact or responded since told I would have to make a good faith payment.

I received a tax intercept notice from sally Mae this year. My husband filed a joint return, He assumed since the debt was two year prior to our marrage and that all income was his that it could not be intercepted. Now once again I received a letter stating “In order to discuss this possibility make acceptable payment arrangements, and/or completely satisfy your outstanding defaulted loan balance, you must contact the collection contractor listed below. This action must occur prior to any federal monies being intercepted.” How can I contact anyone before I know the intercepted the tax refund. I am more then willing to send a second written letter of dispute. Should I send a letter of dispute? I don’t see what good that will do they already have one or should have one on file. I looked at some forms that I can file but they all ask for a lot of information on my husband which we do not want to give…as all the information we provide to them the more information can be given to other regardings my husband. The other issue is that all these forms ask for verification of income such as a paycheck stub, I am not sure how to verify I have a zero income? I guess my question is what are our options? Should we give the information regarding my husband to Sallie Mae?

Regina”

The Answer:

Dear Regina:

Thanks for your question.

You should contact the Taxpayer Advocate Office and ask for your husband’s portion of his refund as he is an “injured spouse”. Prepare a Form 8379 and provide it to the Advocate. You should be able to get the husband’s portion of your refund.

You can find your local TAO office, click here.

Please let me know if you have any other problems.

In Service,

Jim

Jim Buttonow is one of the resident debt experts here at GetOutOfDebt.org that helps people for free. Jim is a licensed CPA who spent 19 years with the IRS coordinating large compliance teams of IRS agents and specialized personnel. In the last 5 years, Jim has invented consumer and practitioner software and treatises on how to address many different tax issues. He has also represented many people before the IRS examination, collection, filing, and appeals functions. He currently assists taxpayers on an active pro bono tax practice aimed at serving people in need. He can be reached at IRSMind.com.

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

I Am Afraid ECMC is Going to Garnish My Wages for an Old Sallie Mae School Loan. – JoAnn

Steve Rhode — Tue, 26 Apr 2011 17:22:08 +0000

From How to Get Out of Debt

“Dear Steve,

I have a 24 year old student loan that started out at $2,300 and is now over 10,000. Sallie Mae had the loan and kept some of my taxes years ago.

5 years ago I put it on a Bankruptcy not knowing it was not discharged. Now ECMC has the loan I tried to get it out of default a year ago when a my elderly Father died changing my financial situation.

This year ECMC kept my taxes of course I was not notified. now they want me to consolidate my loan and if I do that I will end up paying over 27,000 at a payment I can not afford.I make roughly 24,000 a year.

Also this was a Gaming school in Las Vegas which is now been closed for over ten years do to Bankruptcy. I had no diploma or GED barely an 8th grade education.when I was given the loan, the school told me it was no big deal gave me a small math test in which they provided the answers to. I could not get a job dealing without a diploma or GED…I am embarrassed to say I still have no Diploma or GED. I have heard that you can get the loan discharge: False certification if you were not tested properly. And had no ability to benefit.
I have started to pay ECMC 50.00 monthly, they want the Loan Consolidation Form signed and have started calling daily again.

Thank you so much and sorry this background is so long. (There is more but won’t bore you with the ugly details)

Can ECMC garnish my wages if I continue to pay them? Do I have to consolidate? Help! What can I do? What can they do?

Should I try to get the Loan Discharged through the failure to Benefit? What do you think my chances are?
I am desperate. Too many nights lying awake afraid they will garnish my wages then I can’t pay the bill just to live day to day.

Jo Ann”

The Answer:

Dear Jo Ann,

I’m curious if you ever received a reason why your student loans were not discharged in your bankruptcy. They were old enough at the time that they should have been eligible to be discharged.

The position that the loan should be waived because the school closed does not seem like it would fly since it appears that the school closed 14 years after you attended it. But it does not hurt to try I guess. Here is the Sallie Mae form to apply for loan forgiveness due to a school closing.

You may want to adjust your tax withholdings so you are getting more back in your check each month and not leaving refunds waiting to be captured.

If you have an agreed upon repayment plan with ECMC and you are making the payments, they would have no reason to garnish your wages.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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 Co-Signed on a Loan for My Son to Attend Pilot School But It’s Closing. – Jake

Steve Rhode — Thu, 14 Apr 2011 19:43:44 +0000

From How to Get Out of Debt

“Dear Steve,

I co-signed on a $50.000 loan for my son to attend pilot school. The loan was taken out with Salle Mae. After one year the school filed chapter 11 bankruptcy. And it is looking like it will now go to chapter 7. My son had only used up 12000 of the loan. The balance of 37000 which the school had is gone. My son cannot afford his loan payment of 470.00 for 13 more years and my wife and I cannot help him. I have lost over 50% of my income. My son and I both have excellent credit.

Is there anyway that we can get his balance reduced? I have read a little about debt reduction but don’t want to get into a bigger mess. Or do you have any other suggestions? Thank you

Jake”

The Answer:

Dear Jake,

Sallie Mae has a process to deal with this. They publish a form to be used to request loan forgiveness due to a school closing.

The best thing to do would be to contact Sallie Mae right away and start talking to them about this particular situation. It’s probably going to be an administrative nightmare but at least there is a process.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

Is It Possible to Settle a Sallie Mae Student Loan?

Steve Rhode — Sun, 09 Jan 2011 19:24:16 +0000

From How to Get Out of Debt

“Dear Steve,

My daughter attended a private university here in san francisco, University Academy of Arts, and obtained a Bachelor Degree in Merchandising in 2009. She borrowed the money from SallieMae for $56,489.19 and I’m (mom) the co-signer.

Loan Amount $43,454.00 – Current Principal Balance $56,489.19 Loan $5,000 – interest 6.250% – Principal Balance = $7,583.61
Loan $9,000 – interest 6.250% – Principal Balance = 12,397.37
Loan $5,000 – interest 4.750% – Principal balance = 6,218.80
Loan $17,454 – Interest 4.750% – Principal = $21,070.39
Loan $7,000 – interest 10.875% – principal balance = $9,219.02

She has been deferring the loan for over a year, but must start making the payments in April of 2011 for $454 (raft estimates) per month. However, Vannessa has been unemployed since 2009, living of add jobs and unemployment check. She Just moved to Los Angeles, Ca since the fashion industry there has more potential than San Francisco.

Can we negotiate with them to reduce the Loan and perhaps pay off all at once? or reduce the interest rates of the loan?

Please help us.

Thank you very much.

Morena”

The Answer:

Dear Morena,

In an effort to answer your questions I contacted members of the AACC and asked them for some feedback.

Chris Schornrak from DSN said:

If the SallieMae student loan is federally back and guaranteed by the government the best you can hope for is to contact the Department of Education to defer the payment even longer or to negotiate a lower monthly payment. They will not negotiate on the balance owed.

However, if the account is turned over to a collection agency sometimes you may be able to ask for an elimination of the interest and fee’s the collection agency is charging, but never on the principal amount. When you contact the department of education you will find them very easy and willing to work with.

Alex Viecco from New Era Debt Solutions said:

I have not seen many options for students as of late. The best suggestion is to contact the ombudsman for the University and try to get a further deferment.

I have seen an increase of people enrolling back into school to defer the payment, the catch is that they need to enroll and have 7 units to qualify. We have not experienced much luck in settling with Sallie Mae loans unless they go to a 3rd party collection agency, which may be a little more flexible.

Michael Bovee from Consumer Recovery Network said:

Negotiating a reduced balance payoff for student loans can be problematic. If the loans (each of them) are completely private, you may be able to accomplish your goal of settlement.

If a loan, or any portion of the loan, was guaranteed by the federal government, challenges arise.

Government backed student loans are generally not settled. There are far reaching collection tactics that the government enjoys that private industry does not. Tax refunds being arbitrarily intercepted is one example.

As a parental co-signer, you are on the hook here as well.

There may be an option for forbearance if Vanessa has not been granted one in the past. There is the income based repayment option (IBR) that she may/may not qualify for.

I would encourage you to:
1. Look at all original loan docs and be sure to qualify the debts as private.
2. Request a loan history from the servicer
3. Call Sallie Mae and discuss the issues

One of the best resources for student loan payment information when facing a hardship is: studentloanborrowerassistance.org

I think the Income Based Repayment program (IBR) is really a good program for lowering student loan payments and eliminating student loan debt if she qualifies.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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 Am a Firefighter and EMT and I Need to be Rescued From My Sallie Mae Student Loans. – Cindy

Steve Rhode — Wed, 15 Dec 2010 18:36:09 +0000

From How to Get Out of Debt

“Dear Steve,

I am a firefighter/EMT I have 2 grown children my 32 year old son is disabled and lives with me and my husband. I decided to go back to school online and ended up with about 4 student loans. I had some financial problems due to my hours at work being cut so i got deferments on all my student loans and I thought everything was fine until I got a phone call at work from a collection agency about a student loan that I didnt even know I had with Sallie Mae.

The collection agency is demanding I pay 1900 dollars or 1000 and make payments I dont have 1900 or 1000 and they arent willing to make reasonable arrangements.

I dont understand why Sallie Mae could not contact me since the collection agency didnt seem to have any problem finding me instead of just turning me over to a collection agencys and all the other student loan holders sent me a bill. I dont think its fair for them to expect me to pay this large sum of money all at one time. I dont mind paying what I owe but I need reasonable arangements since I dont feel that this is my fault.

My question is what can I do to get this matter resolved where I can make reasonable payments. Also where can I file a grievance against Sallie Mae.

Cindy”

The Answer:

Dear Cindy,

Sallie Mae issues both federal and private student loans so I don’t know which you are having an issue with. Hopefully your Sallie Mae loans are federal loans.

If they are then contact the Federal Student Aid Office of the Ombudsman, here for assistance in intervening in your student loan hell.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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.

Should I Pay Down My Private Student Loans or Just the Minimums? – Anthony

Steve Rhode — Sun, 28 Nov 2010 13:30:14 +0000

From How to Get Out of Debt

I am a recent college graduate with $80k in student debt. I attended a private college in Santa Barbara, CA, thinking they would provide the best education, an awesome alumni network, and a solid leg-up above the competition. True, I am working for $32K a year while my counterparts are struggling to work at Borders, however I have a lot of debt to deal with.

Here are my approximate debts:
-$45k are two unsubsidized private student loan under Sallie Mae at interest rates at 6.88 and 5.25 percent.
-$25k are multiple debts with differing interest rates under 7 percent.
-$10k is interest free (low-income)

I am enrolling in the local community college to learn more about business and finance for $140 to defer my loans, however my unsubsidized loans will continue building interest.

Should I begin aggressively paying down my loans, living almost paycheck to paycheck except for 10 percent savings, or pay the minimum until I find a better paying position?

Anthony

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Will My Sallie Mae Student Loan Debt Be Discharged When I Die? – Roz

Steve Rhode — Wed, 17 Nov 2010 02:58:18 +0000

From How to Get Out of Debt

will my children inhert my credit card/student loan debt?

I am a third way through my masters degree as a part time student I am taking mostly subsized sallie mae loans, which will total about $50K upon graduation.

I had assumed that my debt would be dischargable upon my death…but am now seeing that may not be the case…I would turn over in my grave if my children had to incur this debt while building their own financial future.

not sure if I should stop now…with approx $25K accumulated…but alas…no degree in hand. Unfortunately, although I am a single mother, I do own my home (current value approx $175K (in FL with little equity and a 30yr mortgage), I am caucasian, and this is a graduate degree. These factors seem to disqualify me from many of the grant programs available to low income single mothers.

Any ideas how to protect my childrens interests? know of any grant programs/ways to approach financing my education other than SM?

Roz

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What Can I Do About My Student Loans? – M

Steve Rhode — Mon, 25 Oct 2010 13:28:29 +0000

From How to Get Out of Debt

My student loan debts were accrued sometime in 1993 when I deferred. I had consolidated all my loans by then. Due to inability to find a job, I defaulted. In or about 2003, I was able to gather some certain about $70,000 which I wanted to use to pay off my debt. I think my student loans were around in the ballpark of 130K, but Sallie mae and their agents settled all the debts and returned my documents. A year plus later, I got a call from the government that I owed them about 100K based on a $30K that was transferred by Sallie Mae. The accounting was wrong and insofar as I can see, the government has no documents substantiating their claims for $100K. I am embroiled in a lawsuit which I filed b/c I got sick and tired of being railroaded and noone was accountable.

My debts unfortunately fell after bankruptcy changed its law. And right now, I have no options. Do you know what available remedies that is available? I offered to pay about $30K the principle that they claim, but not the $70K which they claim are interests and fees.
They don’t have documents other than some internal ledgers and I would rather settle this and move onward but $100K seems ridiculous based on what I have seen.

Do you know if the government will pass any measures that will give student borrower like myself the ability to settle, and the ability to have forgiveness ?

This type of law and policies are changing, but it seems better on paper and being that I am in an odd situation, I’d like to know. I raised this issue to AG Cuomo, and his office has rejected it b/c realisitically, why would his office investigate his own state agency?

This reader question was submitted for site members to answer.

This is your chance to be a hero and help out this person by providing your feedback and answer to the question. Post your response in the comments section below.

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Are There Any Loan Programs That Can Get Me Back in Good Graces With Sallie Mae? – J

Steve Rhode — Tue, 25 May 2010 20:45:42 +0000

From How to Get Out of Debt

“Dear Steve,

Hello. I am an IT professional who has been out of work for two years now. At first, I was getting low level jobs which were adequate enough to pay bills. Then, in 2007, I was in a contract that ended abruptly, causing me to go into default on my Stafford loan (Sallie Mae). I found another contract in the beginning of 2008 but it ended in a few months and I have been looking for work ever since. After applying everywhere, I am finally being contacted for a govt job I applied for months ago but I am still receiving calls from my creditors. Due to my unemployment status, I’ve been unable to pay or even negotiate with the collections agencies because my living expenses must come first.

My question is: How may I obtain relief from this debt situation before I get slapped with a default judgement and are there any programs which can get me back into a good payment standing with my original loan guarantor?

Thanks.

J”

The Answer:

Dear J,

If your loans are with Sallie Mae you’ll have to talk to them about any sort of rehabilitation plan that would allow you to bring your loans current. At the very least you’ll need to make at least your contractual payment.

If you have a government backed student loan you’d have a lot of options. Sallie Mae, not so much.

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!

@GetOutOfDebtGuy

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 Think Sallie Mae is Violating My Collection Rights. – Robyn

Steve Rhode — Mon, 05 Apr 2010 20:44:29 +0000

From How to Get Out of Debt

Robyn

“Dear Steve,

I have a private student loan with Sallie Mae. I got this loan to go to a computer training school in Massachusetts. I now live in California. They are threatening to default if I do not pay $842 by August 8th. I am not refusing to pay them, I am just not able to make the entire payment by that date.

I have not called them about the payment yet. To be honest I am terrified to speak to them because every time I do they go out of their way to incite an argument, I will not yell and scream, but they do. They are generally verbally abusive and terribly rude. I have also been receiving phone calls from them starting at 5:30am, since my loan went into collections. My cell phone is a Massachusetts number, but I live in California. I have told them repeatedly to stop calling me that early, they have apologize and said that yes, that is much too early to be calling me, but then they continue to do it and call me every morning at 5:30am.

Are they allowed to default my loan if I am not able to make the entire payment? Are they obligated to work with me, or can they default even I offer to make a partial payment?

Is it legal for them to be calling me at 5:30am?

When it comes to a private loan, do borrowers have any rights at all? What are collection officers allowed to say and not allowed to say to me? Is there any kind of conduct code they must follow, or are they allowed to treat me like dirt?

Robyn”

The Answer:

Dear Robyn,

Well there is something called the Fair Debt Collections Practices Act (FDCPA) which says what collectors can and can’t do. The problem is that it does not apply to the original creditor, but to appointed outside collectors on behalf of the debt owner.

Since Sallie Mae is the original creditor this does not apply to them. In California there is a similar piece of legislation called the “Rosenthal Act” that most mirrors the provisions of the FDCPA.

Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time
Failure to cease communication upon request: communicating with consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further communication or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted
Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously: with intent to annoy, abuse, or harass any person at the called number.
Communicating with consumers at their place of employment after having been advised that this is unacceptable or prohibited by the employer
Contacting consumer known to be represented by an attorney
Communicating with consumer after request for validation: communicating with the consumer or the pursuing collection efforts by the debt collector after receipt of a consumer’s written request for verification of a debt (or for the name and address of the original creditor on a debt) and before the debt collector mails the consumer the requested verification or original creditor’s name and address
Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector’s misrepresentation that he or she is an attorney or law enforcement officer
Publishing the consumer’s name or address on a “bad debt” list
Seeking unjustified amounts, which would include demanding any amounts not permitted under an applicable contract or as provided under applicable law
Threatening arrest or legal action that is either not permitted or not actually contemplated
Abusive or profane language used in the course of communication related to the debt
Communication with third parties: revealing or discussing the nature of debts with third parties (other than the consumer’s spouse or attorney) or threatening such action
Contact by embarrassing media, such as communicating with a consumer regarding a debt by post card, or using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business
Reporting false information on a consumer’s credit report or threatening to do so in the process of collection

SallieMae is notorious for being hard nosed collectors. Once you fall behind they no longer seem to be the same friendly people that lent you the money to begin with.

To overcome the phone issue I would keep a log of their calls if this matter escalates and/or change your telephone number on the phone.

SallieMae has no programs to let people enter affordable repayment plans like government backed student loans do.

Big Hug!

@GetOutOfDebtGuy

My Husband and I Are In Over Our Heads. – Vicki

Steve Rhode — Fri, 26 Mar 2010 21:15:29 +0000

From How to Get Out of Debt

“Dear Steve,

Help! My husband and I are in over our heads. We have about 20,000 in credit card debt, a school loan of 33,000 in collections, and we are short about 1500 a month in income in order to pay all our bills. We are currently not paying credit cards and school loan and are just scraping by. My husband makes about 45,000 a year and I have been unemployed for about 6 months, with no unemployment benefits. My average income would still not be enough, even if I could find work. (I have been looking) Our mortgage takes one and a 1/4 of his paychecks. He gets paid 2x a month. He commutes out of town so it’s impossible for him to work a second job and I have health issues that limit what type of jobs I can do.(My jobs are uaually minimum wage.)

Our biggest concern is that we are going to lose our home. If we pay his student loan, we can’t make the mortgage payment. So we aren’t sure what to do. We have been trying to work with Dept. of ED to get another loan set up to get his deferment/forbearance restarted but are still waiting. My husband has already consolidated, has run out of deferment/forbearance, and Sallie Mae is demanding payment. We are about 4 months behind now. In the meantime, we are getting collection calls like crazy.

We don’t know what to do. What options do we you think would work for us?

Vicki”

The Answer:

Dear Vicki,

With the government backed loans the IBR, income based repayment, plan is the best solution. It will give you a payment based on your income. Follow the links to see if you are eligible for it and get more information.

Next, the only thing to do with the credit card debt is to get it out of the way and the only way to do that is with bankruptcy. You don’t need a solution like debt management that would still leave you with a monthly payment, you need it to be gone. Find a local bankruptcy attorney you like and make an appointment to go in and discuss your situation with them.

The SallieMae loans are a different story. No real options exist for those other than what SallieMae may offer. I find them to be stubborn, inflexible, and not very helpful.

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!

@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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.

So What Happens if I Did Not Use My Sallie Mae Loan to Pay for School But Used it for Other Things? – Margaret

Steve Rhode — Tue, 16 Mar 2010 15:44:57 +0000

From How to Get Out of Debt

“Dear Steve,

What if you took out a sallie mae loan and the money really did not go to higher education… only for odds and ends and surgery. Is it still considered a student loan in that situation. And if not, would it be best to file bankruptcy including this loan.

Margaret”

The Answer:

Dear Margaret,

Unfortunately this isn’t the first time I’ve heard this same situation. The problem is that you can use your Sallie Mae loan for anything that is school related and some people don’t. That doesn’t mean you then get to treat the loan in a way other than what was agreed to. The ultimate issue here is going to be the master loan documents you signed and the fact that student loans are not dischargeable in bankruptcy.

It’s still a student loan, even though you decided to use it for other things. I’m sorry I don’t have better news for you.

Big Hug!

@GetOutOfDebtGuy

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 Can’t Pay Sallie Mae – Carlos

Steve Rhode — Fri, 29 Jan 2010 20:24:38 +0000

From How to Get Out of Debt

Carlos

“Dear Steve,

Sallie Mae loaned me $10,537.50 on 08/31/1994. I started making payments on it in 2003. Have been in forbearance three times. I have already paid about $7,000 on this loan. he loan is on forbearance until 03/07/2009. Because of financial hardship I wanted to settle with Sallie Mae for $4,000. Total Principal to be paid $13,989.89, estimated interest to be paid during repayment $6,796.20. Estimated total I’ll be paying $20,786.09. PLEASE HELP!!!!

Here is the email I sent Sallie Mae on Monday:

To whom it may concern,
I have made my payments to date as best as I can. My loan is in forbearance until 03?07?2009. The company were I’m employed has had a 20? salary cut accross the board company wide. On top of that, it seems that the company might be closing real soon, it has already laid off 70? of the workforce. I feel that it’s just a matter of time before I’m let go. I would like to see if there is anyway possible for me settle on this loan for the amount of $4,000. This would be everything I have, but at least the debt will be paid off. Believe when I tell you, I have looked at every option to find the best way to settle this debt and not run the risk of defaulting on it in the future. I respectfully ask that you please consider my offer and let me know if this is feasible. Thank you in advance for your prompt attention to this matter – Best regards, Carlos

Here is their response which I received today:

DEAR CARLOS,

Thank you for your inquiry and for your business with Sallie Mae.

Sallie Mae does not negotiate reduced payment of your outstanding balance. If we may be of further assistance, please visit our Web site at www.salliemae.com.

Sincerely,
Customer Service

Is there any possible way to settle with Sallie Mae for less than the principal balance?

Carlos”

The Answer:

Dear Carlos,

Sallie Mae doesn’t need to settle on debt because they know that your obligation to them will survive even bankruptcy. Go bankrupt, they don’t care. They have all sorts of power. They can capture tax refunds, increase your balance by up to 40% as a penalty fee, and keep you treading water with no way to get out of debt.

Under § 523(a)(8) of the Bankruptcy Code, student loans are nondischargeable unless repayment of the loan would impose an undue hardship on the debtor. The burden of establishing undue hardship, by a preponderance of the evidence, is on the debtor. The Code contains no definition of the phrase “undue hardship” and interpretation of the concept has been left to the courts. In this Circuit, the applicable standard is the “totality of the circumstances” test as set forth in Andrews. In applying this approach, the courts are to consider: (1) the debtor’s past, current and reasonably reliable future financial resources; (2) the reasonable necessary living expenses of the debtor and the debtor’s dependents; and (3) and any other relevant facts and circumstances unique to the particular case.

The principal inquiry is to determine whether “the debtor’s reasonable future financial resources will sufficiently cover payment of the student loan debt – while still allowing for a minimal standard of living”; if so, the indebtedness should not be discharged. Bankruptcy courts are required to analyze a debtor’s student loans, and make a determination of nondischargeability of them, on a loan-by-loan basis. There is no authority in this Circuit for discharging only a portion of a particular loan. – Marie vs Citibank

I think the email response you got from them is fairly typical and I am sadly not surprised by it at all, even though Sallie Mae says they will work out individual repayment plans.

Sallie Mae does not offer an Income Contingent Repayment Plan (ICRP) that would allow you to repay your student loans based on what you can reasonable afford to pay. Just recently a judge ruled that because Sallie Mae failed to offer an ICRP option that a student would be unable to repay her student loans without undue hardship and allowed the student to discharge some of her student loan debts in a Chapter 11 bankruptcy which follwed a chapter 7 bankruptcy to discharge all other available debts first.

I’m afraid the news isn’t sunshine and lollipops when it comes to student loan repayment difficulties. I’d suggest that you talk to Sallie Mae about negotiating a monthly repayment that you can afford and if you can’t afford anything then go and talk to a bankruptcy attorney about a potential discharge of your student loans in a Chapter 11 bankruptcy because they pose an undue financial burden on you.

Big Hug!

@GetOutOfDebtGuy

Am I Going to Be Piled Under SallieMae Student Loan Debt For The Rest of My Life? – Mike

Steve Rhode — Thu, 28 Jan 2010 12:10:34 +0000

From How to Get Out of Debt

“Dear Steve,

My father owns his own small law firm (him a secretary and a para legal) his income was about $200,000 a year when I was 17 but it included running his business (rent, paying employee salaries, health care, taxes.. etc). The government said we made to much $ for me qualify for federal loans so he was forced to take out private loans for me. I have $130,000 in private student loans. I currently have a 25 year loan with sallie mae and my payments are $1000 a month. I currently make 63,000 a year and this is about 20% of my income a year. I am now 25 years old. and receive no assistance in paying these loans off.

Is there anyway to lower my payments, reduce my debt, or receive any type of government assistance (like the recently announced forgiveness for federal loans after 20 years) for private loans or am I just going to be screwed and piled under a mountain of debt for the next 25 years of my life?

Mike”

The Answer:

Dear Mike,

SallieMae loans are not government backed loans and thus have none of the benefits of current programs like the Income Based Repayment program or IBR that are available to government backed loans. SallieMae has taken a very hard stance and basically said “tough luck” to people that took out their loans.

I’m afraid that even a potential Obama Student Loan Forgiveness program will not be of any help with SallieMae loans.

Student loans are a trap. They’ve always been a trap. People took out massive loans never thinking about repayment and of all the loans and student loans are among the worst being essentially unable to be included in bankruptcy.

Big Hug!

@GetOutOfDebtGuy

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.

Your Searches and Speed Round Answers

Steve Rhode — Mon, 28 Dec 2009 23:11:39 +0000

From How to Get Out of Debt

I was looking through the recent search phrases on the site this morning and thought I’d take a whack at answering some of them quickly so I’m trying a new approach, the speed round.

What happens if you do not answer a debt collectors who is an attorney? If you mean answering the phone, you just flow further down the collection river. If you mean answering a lawsuit, if you don’t respond, you automatically lose.
Is debt consolidaton available by sallie mae? Here is what Sallie Mae says, “Severe legislative cuts made by Congress made federal student loan consolidation uneconomical. This, combined with the credit market deterioration, has caused us to suspend participation in the federal consolidation loan program.” Here are your repayment options.
How to negotiate with credit card companies. Call them and let them know what you can afford, don’t over promise. If you want someone else to see if they can put together a repayment plan for you, click here for debt management information.
I have no money to pay car financing. That’s not good. Sounds like you’ve got two options potentially in your future, repossession or a Chapter 13 bankruptcy to try to restructure your debt. If you simply can’t make the car payment consider a voluntary repossession and give the car back. You’ll get a big bill afterwards, but you can include that in a Chapter 7 bankruptcy and discharge it.
I’m behind on car payment. Time to evaluate your budget and figure out if you can even afford the car. Most people need transportation to get back and forth to work so it is necessary. Talk to a bankruptcy attorney and see if eliminating your other debts would allow you to keep your car. Click here for a free bankruptcy consultation.
(salliemae) AND (aviation OR aviator OR pilot OR plain OR aircraft OR helicopter OR “hair design” OR “beauty institute” OR “hair institute” OR culinary OR cook OR chef OR mechanic OR “interior design” OR landscaping OR “1 (888) 2-SALLIE” OR massage OR therapy OR “culinary institute”). What in the world were you searching for? I hope you find it.
How to get free airline tickets. Have a friend give you one.
They say they can get you a loan but then cant. If that’s the case, it’s a scam.
Loan forgiveness for stay at home moms. Sorry, nope.
Should i pay off my credit cards completely? I’ll go with yes.
“american express” and “credit counseling”. Not a great mix. American Express really doesn’t play nice with credit counseling in general. American express is a “take no prisoners” creditor.
Getting in trouble with bankruptcy court. Ouch. You want to avoid that so you don’t win a free trip, all expenses paid, to Club Fed. You can go to prison for bankruptcy fraud.
401 cashout. If you are taking cash out to pay down debts, don’t.
Credit card debt settlement payment lost. Always send debt settlement checks by traceable means to prove they got it. FEDEX or UPS are the best way to go.

My Daughter Took Out Student Loans. I Couldn’t Co-Sign. Her Grandmother Did. Now She Can’t Pay. – Lorrie

Steve Rhode — Sat, 13 Jun 2009 18:09:07 +0000

From How to Get Out of Debt

Lorrie

“Dear Steve,

Four years ago my daughter decided to go back to school. She took out student loans through Sallie Mae. I tried to co-sign for her but was turned down… my mother was not.

So now we have a problem of course, my daughter has 2 children, no job and the ex-husband doesn’t work either.

My mother (the co-signer) is 80 years old and is on a fixed income. Sallie Mae calls my daughter for pmts but of course she has no money to pay them so the harass my mother.

What can we do about this?

Lorrie”

The Answer:

Dear Lorrie,

Another example of why I hate student loans. People constantly perceive them as good debt, but the majority of people that have student loans never graduated with a degree.

Here is the deal with co-signing, it means you are totally responsible for the debt if the loan goes bad. You 80 year old mother is on the hook for these student loans of her granddaughter.

And to make the matter worse, she can’t break her bondage to these debts without a Chapter 11 bankruptcy, which will be expensive. A regular bankruptcy can’t remove or discharge student loan debt and even the SallieMae site says:

If you’re having serious trouble paying back your debt, bankruptcy is not an easy out. In fact, bankruptcy should be considered an absolute last resort. And, after all your effort, student loans are not normally included in a bankruptcy filing.

Unless you can show that your education loan payment is an “undue hardship” on you, your family, and your dependents, your student loans are ineligible for cancellation (discharge) in bankruptcy.

It is difficult to prove “undue hardship” unless you are physically unable to work and there is no chance of your making money. To discharge your student loans under this special case, you must file a separate motion with the bankruptcy court and present your situation before a judge.

Your daughter, her granddaughter, has placed her in a horrible position by defaulting on her loans. I realize that it is what it is, but it is grossly unfair to your mother. Then again, life’s not fair, is it?

If you want to rescue your mother from this position I think you need to contact a local bankruptcy attorney and go in and explain the situation. The bankruptcy lawyer can give you an estimate of how much a Chapter 11 bankruptcy will cost.

Big Hug!

@GetOutOfDebtGuy

If I Knew Then, What I Know Now, I Would Have Run Screaming From Sallie Mae. – Rachel

Steve Rhode — Wed, 22 Apr 2009 15:51:48 +0000

From How to Get Out of Debt

“Dear Steve,

I have a loan through Sallie Mae that is the subject of many a sleepless night, and if I knew then what I know now, I would have run screaming and NEVER taken out this loan.

I graduated from a state university not quite a year ago and took out $42,000 to cover school, books, and living expenses. Because this was a second degree, I had to cover all the expenses myself.

Now that I’ve been out in the real world, I can’t find a job to save my life. With two Bachelor’s degrees, I can’t even get a job at Wal-Mart.

I recently called Sallie May to put my account back into forbearance (which I had done once before to the tune of $150). When I got an operator and told him the nature of my call, he immediately told me that Sallie Mae was no longer offering forbearance and that I needed to pay $400+ dollars to bring my account up to date.

As it stands now, I’m a substitute teacher. I make just a little over $10 an hour, but I don’t get paid on days when I don’t get called into work. $400 is about what I make in a month, and the summer is fast approaching. This guy on the phone was adamant that the reason I was upset was because I “wasn’t getting what [I] wanted” and was throwing a hissy fit. Furthermore, he kept reiterating that it’s not Sallie Mae’s fault that I can’t afford the $400 payment (because, I’m sure, the 9.25% interest rate has nothing to do with it…) and that by asking for anything less than $400 a month I was doing a disservice to myself since the interest would “just keep going up” (nice to know that Sallie Mae cares…).

When I once again explained to him that $400 is my monthly income, he asked me what I *would* be able to afford. When I told him that $150 a month would be manageable until I find steady employment, he laughed at me and told me not to bother! That $150 a month wouldn’t do me any good! The nearly $10K in *interest* that’s accrued since I graduated *less than a year ago* has been capitalized and added to the principal, so I now owe them $53K+! I don’t want to shirk my responsibility to repay my loan, but I’m staring a default right in the face.

Honestly, if I were teaching full time, $400 a month would not be impossible, but no one is willing to work with me until I get on my feet. Instead, I get threats and constant phone calls trying to bully me into payments I simply don’t have, and there’s no middle ground. Do I have any recourse or options at this point?

Rachel”

The Answer:

Dear Rachel,

You have unfortunately learned the hard way what I have been saying for years, student loans are minefields and not automatically “good debt.”

Sallie Mae is not what I would call, an accommodating lender. While they offer an “income-sensitive” repayment plan you must still make at least the monthly interest payment. In your case, I’m not sure if that is the $400 per month they keep throwing back in your face, but it sounds like it.

To repay your student loans in ten years your payment would have to be around $680 per month. Even if you just made the $400 monthly payment, you would not be reducing the amount you owe one penny.

Student loans also can’t be discharged in bankruptcy, with an exception, a Chapter 11 bankruptcy may discharge certain student loans in some cases.

The student loans have you boxed into a corner that can only be remedied with more income. You will have to do whatever you can to make money and pay the ^@(^#%#@ or face massive collection fees, wage garnishment, and worse.

The only solution I can think of is the student loan forgiveness program for teachers. But you would have to be a full-time teacher for five consecutive academic years in a “low-income” non-profit school, and then you could qualify for a federal loan forgiveness program.

Big Hug!

@GetOutOfDebtGuy

I’m Divorcing My Deadbeat Husband and He Wants Me to Pay His Student Loans. – Janet

Steve Rhode — Mon, 13 Apr 2009 21:44:10 +0000

From How to Get Out of Debt

“Dear Steve,

I am going through a divorce, and am drowning in debt. My “husband” was unemployed for 6 years, which caused me to borrow money to help the family survive. He graduted from school last year, and is currently unemployed and has decided (told me so) that I must be the one to pay for his Sallie Mae school loans, over $12,000 worth of it that i co-signed for anyways. I make $30,000 a year, but I have 2 children and a car loan and the other $12,000 loan as well as his school one, and many utilities that i had fallen behind in while he was living with us.

Is there any way at all for me to get absolved of having to pay the Sallie Mae loan?
I really don’t want to do a bankruptcy and lose my car just so I can afford to pay off my deadbeat husbands school loan while he sits somewhere doing nothing.

Please help!

Janet”

The Answer:

Dear Janet,

Wow, he’s really quite a loser. He makes mean look nice. And the worst part of this, he’s got you boxed into a corner with no way out.

I’m sure at one time you loved him but the time to have fixed this situation was when he would not get off his ass to help the family survive, years ago.

The instant you cosigned for the student loans you made yourself jointly liable for his loans. You could always not make any payments and let the student loan lender go after your deadbeat, soon to be ex. But if you guaranteed those loans they will soon turn and want to talk to you for repayment.

And now that you are on the loan, the lender is not going to want to let you off the hook.

Unfortunately I think that bankruptcy is probably the most reasonable solution. The car lender will probably let you reaffirm the loan and keep the car. You should talk to a local bankruptcy attorney about your situation and the total amount of debts that you owe. You’ve got to get yourself in a position to make those student loan repayments. They can’t be discharged in bankruptcy and you don’t want to let them rack up massive interest and penalties by letting them rot.

Moving forward Janet, make sure your loving ex-husband is on the hook for child support through the courts. If he does not pay, I want to see his ass in jail, and I’m a forgiving liberal. This man needs no more consideration and breaks from you. You’ve done enough and he’s done enough to you. Do not let him walk away from his responsibility for the children you had together.

You deserve an extra big hug.

Steve

I’m Not Making Any Progress Paying Back My Sallie Mae Student Loans. – Krista

Steve Rhode — Thu, 12 Mar 2009 19:58:35 +0000

From How to Get Out of Debt

Krista

“Dear Steve,

I have just over 74k in student loan debt with sallie mae. One bill is for about 55K at a 5.1% interest rate. The other if for about 19k at a 4.75% interest rate. I have been paying $550 a month for almost a year now and I am not seeing a reduction in my loan! Please tell me there is another option. I don’t mind paying back money I borrowed, but at this point I feel like I am just throwing my money in the wind.

Is there another option? Maybe a company that will buy my loans and charge me a lower interest rate?

Krista”

The Answer:

Dear Krista,

You’ve already got low rates. The only solution to knocking down how much you owe is going to be to increase your monthly payment. See “I’m Drowning in Private Student Loans. – Kathy” for some links to companies that consolidate student loans.

The bottom line here is that you owe a lot of money and it is expensive to payoff $74,000 of debt, even at really great interest rates.

Big Hug!

@GetOutOfDebtGuy

Rebecca the Nurse Wants to Get Her Student Loans Off Life Support

Steve Rhode — Wed, 17 Dec 2008 20:19:21 +0000

From How to Get Out of Debt

“Dear Steve,

Student loans private 30,000 at 10% with five separate loan groups/amounts refuse to consolidate and lose control of options. Federal two groups one at 27,000 the other 29,000 both at 5.75%. 39 years old and have been working as a nurse for 1 year making at this time $62,000. I want to attack my sallie mae loans!

I’m highly motivated to make great sacrifices in a monthly budget so ask to ask my above mentioned loan. How do I formulate a strategic plan to pay off this debt wisely? How do I best access up to date information regarding the student loan industry itself along with my consumer rights?
Rebecca”

The Answer:

Dear Rebecca,

Unfortunately your private student loans have fewer options. While those student loans are protected from discharge in bankruptcy, there is no requirement that the lenders doing anything to assist you at all.

The good news is that there are options regarding your Sallie Mae loans and the Sallie Mae website is an excellent source of repayment options available to you.

Standard Repayment

The standard repayment plan offers the lowest overall cost. When you start repaying, your loans are automatically placed into this plan. Your monthly payment amount remains the same over the term of the loan.

Use Sallie Mae’s monthly loan payment calculator to see how this plan might work for you.

Extended Repayment

Lower your monthly payment without the inconvenience of applying for a new loan. Plus you can prepay your loan(s) at any time without penalty. If you have more than $30,000 in federal student loans, this option may be the best choice for you.

Graduated Repayment

With graduated repayment, your monthly payments are lower at the beginning of repayment and increase over the term of the loan.
You can choose to make payments as low as interest-only for up to four years. Payments for the remaining term will then be higher.

Income-Sensitive Repayment

Your payments are based on a percentage of your monthly income — from 4% to 25% — as long as you pay at least the interest that accrues every month.

If You Are Currently Repaying Your Loans

If you are currently repaying your loans you can login and find out what your Sallie Mae options will be by going to ManageYourLoans.com.

Big Hug!

@GetOutOfDebtGuy

The Answer:

Anne is Struggling With Her Student Loans and Sallie Mae

Steve Rhode — Tue, 09 Dec 2008 20:39:25 +0000

From How to Get Out of Debt

“Dear Steve,

I am currently in debt management and I have used up all of my forberance. I cannot make the payments. Half of my take home pay goes to debt management.

Is there any way I can postpone payments rather than forberance or financial hardship? Sallie Mae will not give me financial hardship–they say I make too much gross income to qualify. But, paying half my salary to dept management only leaves the other half for mortgage, etc. I am struggling every month.

Anne”

The Answer:

Dear Anne,

While you used the term debt management, which typically refers to a credit counseling program or approach, i think what you are struggling with are your student loans. For detailed information about how you can work with your lender on this see “Tiffany is Behind in Student Loans, Late On Other Payments, And Looking For Hope.”

I am becoming more and more concerned about student loans. They are often terminal debts, unable to be discharged in bankruptcy and unable to be afforded. The cost of college has accelerated way beyond the cost of living and a college education today costs a substantial amount of a families income, to the point where it is not affordable.

What was once considered good debt by many, is getting hard to justify in uncertain economic times.

Big Hug!

@GetOutOfDebtGuy

The Answer:

Lauren is in a Fabulous Foreign Country and Can’t Afford Her Student Loans

Steve Rhode — Tue, 25 Nov 2008 01:46:17 +0000

From How to Get Out of Debt

“Dear Steve,

Okay, I am currently a grad student in a foreign country which is cool and wonderful and educational and definitely worth the money. However, it’s costing me money. I currently have a $77,000 price tag in student loans and would like to reduce this amount. Because I am overseas it is very difficult to get a job and work through the university pays according to the local economy which is much less than required.

Are there options for me to begin paying off some of this debt (at minimum the interest that is accruing) while enrolled? What steps can I take to set myself up to be successful when the deferment ends?

Lauren”

The Answer:

Dear Lauren,

I’ve been a critic of student loans for some time. My primary issue with them is that they are pushed on students and people believe that they are ‘good’ debt. Yet, they are the largest debt that a college student will have, they can’t be discharged in bankruptcy, if you don’t graduate you still owe them, and if you default, you can pay as much as a 40% penalty.

Total borrowing for school has more than doubled to $85 billion in the 2007-2008 school year from $41 billion 10 years earlier, adjusted for inflation, according to the College Board, the research and testing concern. The percentage of private loans, which generally carry less-generous terms, has ballooned to 23% from 7%. Meanwhile, subsidized federal aid has remained relatively flat at about $42.8 billion per year.

The fear is that default rates on student loans will increase, as seen in the mortgage and credit-card worlds. SLM Corp., or Sallie Mae, the largest private student lender, reported a delinquency rate of 9.4% in September, up from 8.5% a year earlier. “It’s clearly because of economic conditions,” says spokesman Tom Joyce. “The credit crunch has washed onto the student-loan beach.”

That prompted state and federal governments to pass legislation allowing them to seize income-tax refunds, withhold professional licenses and enlist collection agencies to gather payments. Meanwhile, the U.S. Department of Education withheld eligibility from federal financial-aid programs from institutions that didn’t keep their default rates low. – WSJ

Student loans can hold your career and dream job hostage and I’m afraid you are learning about the realities of that first-hand.

The lender will say that that it is your choice to place yourself in a position where you can’t afford to pay and that is not their problem, it’s yours.

Going to college is one of those things that is beaten into many of us from a very young age. We are programmed that we must go to college to succeed, but is that really a valid belief to have?

The cost of a college education does nothing but go up, up, up. And more and more of those expenses are being financed with student loan debt. This isn’t necessarily a good thing.

Student loan debt ends up being rationalized as being good debt. It is a debt worth undertaking to get the payoff of having a college degree. Parents want their children to succeed and students are eager to attend college to get that diploma that will either allow them to follow their dreams or get a better paycheck. Least we forget the college student aid offices that enthusiastically want students to take on loans to attend. We can’t forget that colleges make money by having students pay tuition and fees. For profit or not-for-profit, all colleges at their core are a business that yearns for income.

Nearly 66% students today are graduating from a four year school with $19,202 in debt and if they went to a private four year school, 87.3% of students graduate with $28,138 of student loan debt.

Interestingly, many cry out about the evils of credit card debt and college students and want to ban on campus credit card marketing but the amount of student credit card debt is about $2,200. And surprisingly the number of students with credit card debt is declining.

Debt is debt. Debt does not care what form it is in. A debt for $28,138 and $2,200 must still be serviced the same way; labor must be converted to common currency to repay the obligation owed.

Student loan debt is the bigger obligation and more financial threatening than you would imagine. You see, unlike most other types of debts a student loan is a loan for life. A federal student loan has no statue of limitations and you may be chased for the rest of your life to repay. It can’t be discharged in bankruptcy. You can have any tax refund due you intercepted and used to repay the loan and massive collection fees and penalties of 25%-40% of the loan balance can be added to the loan balance if you default, raising the amount you owe by a very large amount.

If you have been paying attention to all the facts that parents and teachers have been telling you, you’ve heard how college graduates earn an average of $82,000 while those with less than a high school diploma earn around $21,000. Those numbers certainly help to persuade many to go for the college degree.

But let’s challenge those assumptions for a moment. If we look at the 87.3% of private college student graduating, their student loan debt might be $28,138 as they leave school but with 20 year financing and monthly minimum payments of $214 that debt blossoms into $51,548. That’s significant.

By this point in the article you’ve got to be saying that all these numbers are nice and all but how can going to college not be a smart economic move. Well here is the often skipped statistic that you never hear. Of those that enroll in college, only about 37% actually complete their four year degree.

That means there are a large number of people that have gleefully taken on student loan debt as a good debt, are obligated to repay it, but receive none of the benefit for it. For those people, college becomes a massive financial noose around their neck.

There is no doubt that attaining a college degree is a good thing but in order to receive the financial rewards, you must obtain your degree. And what about those that do make it all the way to graduation, are they better off?

More and more I am talking to recent college grads that are not able to pursue jobs in their desired fields because they have to find any type of employment to service the student loan debt. They have obtained the degree but can’t use it. Before you know it the ability to just follow your dreams is gone, replaced with rent, car payments, student loan debt and increasing credit card debt.

I am a firm believer in education. There is tremendous value in education. But students need to not be feed a mantra of student loan debt is good and gladly embrace student loan debt unless they understand the consequences. The largest of those are: 1) You must finish your degree to get the full benefit of your investment, 2) If your dream field is in a field with low starting salaries, you simply may not be able to afford servicing your student loan debt and following your dreams at the same time.

One of the most disturbing trends I have watched over the past years are those students that work hard to obtain advanced degrees in specialized fields such as law and medicine but what they discover along the way is that the field really isn’t for them.

Instead they wind up owing $150,000 and more for education only to just not want to or be able to graduate in the field they originally started in and obtain the income necessary to repay those very high levels of student loan debt.

Let’s not forget, student loans and financing college can be a tragedy for many. We can’t blind ourselves to that reality and maybe student loans need to carry warning labels. Caution: If you don’t finish your degree this loan could be detrimental to your financial health.

You do have some options for repaying the student loans. Please see a previous article, “I Have Three Degrees But I’m Broke And Miserable” for details.

Big Hug!

@GetOutOfDebtGuy

How to Get Out of Debt With the Get Out of Debt Guy » sallie mae

Sallie Mae – Consumer Complaint – 5-24-2012

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

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