We Are Trying to Get Out of American Educational Services Student Loans

“Dear Steve,

My wife returned to school several years ago and took out some student loans. Those loans were eventually sold to aes. One was for about $10,000 and the other for about $8,000. She has been paying the minimum statement for five years, (about $9,000) but the amount owed hasn’t decreased! The payments are for about $150 a month and the interest rate on each loan is 4.75%.

Apparently the interest in accruing daily. What is the best way to for us to pay off this debt!


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Dear Todd,

The problem is that on a total loan balance of $18,000 the annual interest charged would be about $900. Since you are paying $150 a month you are making little overall progress since the majority of your payment is going to interest only.

I believe your student loans are private student loans which have limited modification options. If these are somehow government back student loans then I’d suggest you contact the Department of Education and ask for information on the Income Based Repayment Program (IBR).

The 4.75% interest rate is pretty darn good so if you want to dig out from under these loans faster you’d need to increase your payment and all of the additional would go towards paying down the balance owed.

If you wanted these loans to be repaid in about five years you’d need to pay about $340 a month. If you can afford that it’s probably the best solution for getting rid of the loans once and for all.

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

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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