I graduated college in 2007 with a mountain of student loans. I had three sets of loans, one large chunk through Sallie Mae amounting to around $52k, and two private loans amounting to about $10k each.
I had an agreement with Sallie Mae to defer those loans for a year after they were up for repayment and I started paying off about $100 each on the two 10k loans. After a year, Sallie Mae and I agreed again to defer my loans.
Heading into the middle of 2009, Sallie Mae suggested that I consolidate all of my loans with them, which I went through the process. They advised me to wait until late summer of 09 for a better possible interest rate, which I took their advice.
When I went to pull the trigger on this consolidation, they advised me that they no longer do loan consolidation, undoing all of the planning that I had for months. What was worse, is when the deferment came up again, they refused to make any arrangements for me for possible deferment or repayment and requested one of two options: a monthly payment of around $800 per month, or the entire $52k in whole.
Neither of these options were a possibility to me as I have about $200 in expendable income each month. After arguing with them for several months, my Sallie Mae loans went into default. I hated having them go into default, but I had no choice as they would not deal with me. Every month, I got notices of default in the mail and I begun to respond to them with the same situation as I was in.
Eventually, they just stopped. Fast forward to 2011. Last week, I got a notice in the mail from GC Services saying that they were requesting repayment of these loans and then my employer was contacted by both GC Services and ECMC in regards to a 15% wage garnishment. My situation has not changed over the years. I still have around $200 of expendable income per month and make about $100 in monthly payments to my other two loans.
My big question: What should I do? I totally admit and acknowledge that I defaulted on my Sallie Mae loans. I didn’t expect Sallie Mae to hamstring me like they did and give me basically zero acceptable options. I’d love to be able to pay off these loans, but if they take the 15% out of my wages, that’ll take all of my expendable income, but take a chunk out of my normal funds as well and after crunching the numbers, I’m going to lose in the end and won’t be able to make any monthly payments on my bills.
What options do I have? I have not yet contacted either GC or ECMC directly to attempt any arrangements, but everything that I have read about this company advises me to be careful as they can be extremely harsh and use unfair tactics.
Any and all advice would be greatly appreciated!
I wish I had better news for you but student loans are nasty and private / Sallie Mae student loans are the worst.
Yes, Sallie Mae pulled their consolidation program when their funding dried up.
And student loan lenders can go for an administrative garnishment of 15% of your income after taxes and FICA. The only way to avoid that garnishment is to negotiate a mutually acceptable repayment plan directly with Sallie Mae. If you can negotiate such a repayment plan you can get your loans current again and after 12 consecutive payments the negative past history on the loans should be removed.
Please post your responses and follow-up messages to me on this in the comments section below.