Is There Anything We Can Do to Payoff the Student Loan for Less?


Dear Steve,

I took out a loan for college for $110,000 between 2006 and 2010. I have paid 30,000 to the principal and 40,000 to interest so far, which is sickening. My husband is in a situation where he can pay the remaining 87,000. I have never missed a payment. We tried to request a payoff settlement, but they said they don’t offer that.

Is there anything else we can do to get the payoff amount lower if we pay in full?



Dear Tracy,

The answer depends on what type of student loan you have.

If this is a federal student loan then you should read this. Technically a minimal reduction in federal student loan debt might be possible, but practically, don’t count on it.

If this is private student loan debt, then currently, you should be able to settle the remaining balance for around $36,000 with payments over a few years. A lump-sum payment is best. However, you will need to get the account in the right department and seasoned for settlement or the answer might be it’s not possible.

But before you do that, I would strongly suggest you get some specific advice about the private student loan debt you have from my friend Damon Day. A call with Damon will go a very long way to avoid making mistakes and get you in a good position to go for a great settlement offer. He knows which hammer to use and where to hit to help people get exceptional settlement offers. It’s more of an art than a science.

I completely understand the irritation with the amount of interest you’ve paid, but this is all just math. Because the minimum payment is set just high enough to cover the interest plus a little each month, you wind up paying mostly interest and less towards the balance.

Trying to get people to double their student loan payments to avoid the massive interest is a strategy most can’t do. For example, with federal student loans, people pay the least amount of interest by repaying using the ten-year standard plan. Opting for a lower payment plan is not always the best way to avoid interest and pay it off. That is a lesson learned too late.

See also  How Can I Settle My Sallie Mae Student Loan Debt? - Roxanne

Again, if this is a private student loan debt, another reason to consider settling the debt would be to preserve as much of the money you have available to instead direct towards retirement savings. People have a terrible deficit of retirement savings, and it will be a crisis when you can least afford it.

I absolutely think you should make the settlement decision based on math, your situation, future retirement goals, and the facts. Damon can help with all of that. Only then can you make a smart and informed decision.


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

2 thoughts on “Is There Anything We Can Do to Payoff the Student Loan for Less?”

Leave a Comment