I Used Up All My Deferments and Forbearance and Can’t Afford My Private Student Loans


Dear Steve,

I took out both federal and private loans to go to a private undergraduate school. I wish I knew now what a terrible idea that was, but unfortunately, I had no guidance at the time besides my rich friends who said I could just take out loans, it would be fine. Even my college’s financial advisers were absolutely useless. My parents, while very supportive, had never been to college and were unable to really help me with any financial advice. They also could not help me pay at all, even though they wanted to.

I worked 2 jobs while going to school full time just to try to make rent, car payment, and cover my insurance. Any extra money I had went into a fund that I had planned to use for loan repayment. My junior year, however, my father broke his back on the job and could no longer work. Worker’s comp refused to pay and my father got denied for disability since he tried to return to work after he had healed enough to move, since my parents were floundering and about to lose their house.

All my money then went to my family so my mom could stay home with my special needs brother and my father could actually heal. I dropped out of college with less than a semester left to complete since I was literally never sleeping and became very ill working both night shifts and day shifts.

I left with over $95,000 in student loans. I used up all of my deferments and forbearance periods while working full time to get my family afloat. My family is now in a secure place since they finally got disability for both my brother and my dad after much struggle.

I was going to go back to college, but I just can’t afford it since I would have to move back to where I started college or lose most of my credits. I don’t think I could get any loans to continue anyways with my now horrible credit. I recently found a dream job I absolutely love and have real potential with, so I really don’t need to go back for my degree. I am actually making money now, although not a lot at the moment, I have potential to make more. My salary is around $34,000 and I can start to pay back my loans, but at this point they are asking outrageous amounts a month since I have been delinquent and only made sporadic payments for the past year.

During my last year at school I stupidly took out a Sallie Mae loan with 11.7% APR because I was in a rush since my federal loans did not come through in time for my school and they were threatening to drop me from my classes and did not give me enough time to find out it was just a matter of incorrect information on the federal loan paperwork. Just that Sallie Mae is over $1000 a month! I can not pay that, my federal loans, my Wells Fargo private loan, my other bills, and still have enough money to eat!

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I have consolidated my federal loans and now have a reasonable payment monthly from them with a pay as you earn repayment plan. However, my private loans are haunting me! The Wells Fargo loans have an option for me to at least consolidate so I am looking into that.

However, my Sallie Mae is hanging over my head and collectors are calling me every day for delinquency. So far I have not found any help with this loan. Since I did not graduate, everywhere I look I can not refinance! Is there any way to refinance or consolidate private loans without graduation? I really feel I have no other option but to default on it at this rate, which as a very responsible person, this makes me look horrible and feel rather angry!



Dear Britt,

As you’ve discovered there are no great easy solutions for private student loan debt. A private student loan is not required to offer you any repayment plan other than what you originally agreed to. Servicers often offer forbearance options which just increase the debt and make an unaffordable loan even more unaffordable.

The obvious first solution is to attempt to work with the lender and pursue payment plans that reduce the debt, not postpone it.

Outside of that you have two major options. The first is to meet with an experienced expert, of which there are few, to explore if your loans are suitable for discharge in bankruptcy or settlement.

Private loans have been problematic because about half the time they are not conforming and thus not protected under bankruptcy and can be eliminated. See These Private Student Loans Can Be Easily Discharged in Bankruptcy.

Your second option is to strategically default on the private student loans. See Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan.

However that process of defaulting is neither for the faint of heart or those without a strategic and defined plan in place.

All of that being said, private student loans are being settled every single day by lenders. Many of them happen in court cases or arbitration and the results are sealed.

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If you want a solution that helps you to deal with this debt you were never going to be able to repay when it was issued, you are going to have to fight for a solution and hunt down the right person to assist you.

It is very frustrating right now that there are so many bankruptcy attorneys out there who don’t have a clue on how to tackle this private student loan debt in bankruptcy.

You made an interesting statement in your question. You said, “Even my college’s financial advisers were absolutely useless.” This is a point I’ve written about for years. People continue to assume the role of the financial aid office is to assist students. It’s not. Their role is to assist the college to get student loans to pay for the college tuition so the school makes money. They do not have a fiduciary duty to the student and have no requirement to either know what they are talking about or offer the best options.

There is ultimately nobody who is going to look out for your best interests but you. You will need to take charge and hunt down good solutions, not easy solutions. However, don’t give up.


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Damon Day - Pro Debt Coach

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