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

By on January 28, 2010
Am I Going to Be Piled Under SallieMae Student Loan Debt For The Rest of My Life? – Mike

“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”

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.

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About Steve Rhode

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.

2 Comments

  1. eric

    June 25, 2010 at 9:42 am

    We have started up an online petition at Save Our Students.com which is dedicated to ending the outrageous loan repayment plans set up by private lenders.

    http://www.saverstudents.com

    Need more Signatures!

  2. KD

    May 17, 2010 at 12:10 am

    The issue with Sallie Mae loans begins with the academic institutions’ financial aid offices. They give poor advice, take a cut off the top of the loan (for what??? there is no real-time processing anymore), and watch helpless student crumble under debt. The percentage the school takes is allegedly based on your credit rating, I took out 168,000 in loans without co-signers because my credit was outstanding.

    I am so frustrated paying $1400/month (and its lower than a year ago thanks to the tanking economy). My rate went from 9-10% to between 3-4.5%. I am going to repay more than double what I borrowed. A whopping $289,000!!! How is this still legal?!
    I have worked to get through school without financial support from my family and will never own my own home/apt/cardboard box. I have been a working professional for 6 years. I am aware that I owe money but why should I feel enslaved? I had to sacrifice my own professional goalsand all of my personal goals for a well-paying position just to afford to pay Sallie Mae each month.

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