Can I Settle My Pace University Signature Student Loans for Less Than I Owe?


Dear Steve,

I graduated from Pace University in 2008 with $104k in student loan debt. The majority of this debt was secured through Signature Student Loans ($87k) with Sallie Mae and then a small debt through Federal Direct Stafford Loans ($17k). I grew up in a single parent home, my mom barely making ends meet, however for some reason I qualified for very little aid. No one in my family had attended college, so no one knew anything about the various forms, options I had etc. At the time, the advice I was getting was that student loans are common and would be my only ticket at an education. So I took them on, eager to break the cycle of my background.

After graduating, I started a decent job with a big 4 accounting firm, but the payments on my $100k were pretty steep – $1000 per month. So I very early on agreed with Sallie Mae to extend my payment terms to reduce the payments to values which were more manageable for me and have been making somewhat regular (barring a few hiccups) payments and have made full regular payments on my government loans which are now nearly paid off. Ten years later, I am financially more sound and can afford to make payments, but at the cost of investing in other elements of my life (like owning a home or saving for retirement). I want to explore options for settling my debt, especially as I feel that given my family circumstances at the time make me feel as though I was really ill-informed in agreeing to that debt.

I’ve looked at your website and others and it seems like there is no option for me as its a private loan, I don’t think I’m the victim of any scams (just a really poorly advised youth) and I am not going through economic hardship (just sick of paying them). Is there a way for me to settle my debt for less than I owe, even if technically I could repay my debt?

See also  How Can I Best Settle My Kids Student Loans?



Dear Anonymous,

You should finish paying off the federal student loan debt and put that to bed. On the private student loan debt with Signature Student Loans and Sallie Mae, I can give you some broad advice. The sticking issue is every situation is different so there is no blanket advice I can give that may pertain to your specific situation.

Private student loan lenders are settling loans for less than is owed. However, to get into the right default cycle to even begin talking about a settlement you need to understand the system.

Tha means you need to be delinquent on your payments, in collections, and at risk of a legal action or suit by the lender to get to a settlement offer position.

Anytime you stop making payments the lender may avail themselves of legal rights and actions agreed to under the lending agreement.

If a settlement is obtained, lenders prefer lump sum payments but have been known to accept monthly payments over a shorter period of time that remained on the loan.

The likelihood of a settlement is also dependent on the underlying story and situation of the debtor. Those with medical problems or other financial woes are often the easiest to settle.

You have to consider this from the creditor point of view. Once a debtor has defaulted on a debt for 90-120 days it falls into the right collection queue that can talk about settling. The creditor will make a determination if some money now is a better return than the possibility of less money in the future.

This process has more to do with a business process than logic. Creditors and logic are not always the best of friends.

If you do decide to consider a settlement approach on the private student loans would be for you to talk to an independent and experienced debt coach like Damon Day. Another person you could talk to is Michael Bovee. But you can also track down one of the few independent debt coaches out there.

See also  The NCO Debt Collector Lied That I Could Settle My Private Student Loan Debt. - Matt

Another option would be to refinance the remaining private student loan debt into a new loan that would give you lower monthly payments. This would give you some room to save but will increase the overall cost of your student loans since you will make more payments over a longer period of time.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Do you have a question you'd like to ask me for free? Go ahead and click here.

Damon Day - Pro Debt Coach

Follow Me
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.
Steve Rhode
Follow Me

1 thought on “Can I Settle My Pace University Signature Student Loans for Less Than I Owe?”

Leave a Comment