Ask The Get Out of Debt Experts Student Loans

Private University Said I Had a Full Ride Scholarship But Now I Have Sallie Mae Student Loans. – Ryan

“Dear Steve,

Hello I am Ryan, a recently graduated college student, and I just found out that I have $12,500 dollars in student loans.

When I was first starting college for my BS in Business Administration the dean promised me a few things. First, he promised that the universities career placement program would place me at an entry level management position. Second, he promised that the free ride he was offering would cover all expenses and cover my entire financial aid package. Neither of these things turned out to be true.

My freshman year of college I had my full ride and got a $12,000 dollar scholarship on top of that. I saw none of that money. My sophomore year I had to take out student loans to pay for books and tuition, but I was assured by the people in the financial aid office that I wouldn’t have to repay the loans due to my scholarship. Well that was a lie. I also took out loans junior and senior years, although I didn’t see any penny of my junior year loans until my senior year because the school failed to get the checks to me. Luckily I had worked during the summer and could pay for their random expenses until my free ride student federal loans kicked in, and I got my money back.

I graduated July 22nd, and was not placed into any career at all. Only towards the end of my Junior and Senior years did I get any kind of help from Career Services. Their ‘help’ consisted of practicing for interviews and writing resumes. I once told the career counselor that I would like to look into getting a job that I wanted or would like to be doing, and he basically told me that’s not how it works I need to do whatever they found for me and work my way up because it is a rough job market. Guess what, after graduation I was out of sight out of mind.

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I moved back home with my father in order to cut down expenses until I could find a management job or any job that I would like doing. I done a few internships but nothing worked out. I didn’t work for about 8 months, but I was actively looking for good career opportunities and applying to many places. Now 8 months later I have received a notice from SallieMae. They claim that my student loan is more than 60 days delinquent. They claim my past due amount is about $500, and that I should contact them to start paying. This was a huge shock! I don’t have any written proof of my scholarship that was never paid or of the university promising to pay all of my student aid through the full ride. When I talk to the University they claim I have to repay student loans, that my full ride only covered tuition, and that my scholarship or loan checks are too old for the school to remember and I’d have to ask the other party about them.

I am hesitant to call SallieMae to work out a repayment plan because I don’t want them to default. The notice they sent includes a default date, and I’m not sure pushing a default forward would be the best choice of action.

When I got this letter from sallie mae I first freaked out, then I denied it, then I was angry. But I finally forgave the university and realized that I would have to live with the consequences of this. In fact some of it was attributable to my own ignorance and blind trust. So I ran out and got the only job I could find, a part time cashier at wallmart making minimum wage. My current plan is to live at my father’s place and work and just pour as much money as I can possibly pour into paying off these loans. I never would have taken a loan had I known I’d have to repay it, that is against my religion. Now that I know I have one I’m into panic mode, gonna do whatever it takes to get the loans paid off.

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I have a couple thousand saved in the bank, this was my fall back and real life happens fund. It could be mostly shoved into a loan though if that’s wisest.

The loans are as follows according to the notice I received: 3500 at 6% FFELP. 4500 at 5.6% DLSUB. 4500 at 4.5% DLSUB.

It was a Private University, if that makes any difference.

30 year repayment forgiveness, deferred payment with interest piling up, getting deeper into debt is not a plan of action that I wish to go.

I got here by not being very smart, and just having a vague plan like work and throw all my money at it isn’t really inspiring any confidence.

What exact and specific plan should I follow in order to get out of this debt, or what resource can I use in order to form an exact and specific plan for myself?


Dear Ryan,

The first step is for you to call Sallie Mae and then report back here. Not calling them doesn’t change anything and we need to know what the situation is to come up with a game plan on how to deal with it.

If you don’t call them and don’t get on the same page as them they are simply going to do whatever their computer screen says and you don’t want that kind of surprise.

Get the facts and we can decide what to do next.

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


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.

About the author

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.


  • if you have a full ride why do you  have loans? you said you don’t have credit cards or checking account so you don’t have credit card dept. what were the loans for?

  • Was my second comment deleted, or perhaps it just didn’t go through?  
    It was rather long, but I’ll try to retype the substance of it.  

    The fact is that by having signed a MPN, I have to repay the loan no matter what else was going on.  

    I finished reading an ebook I found on this site called “Eliminate your debt like a pro.”  From that I took count of all my money and starting keeping record of all incoming and outgoing money.  I also created a budget.  

    So here we go, trying to create a plan:

    1.  Goal:  Eliminate all student loan debt
    2. Budget numbers:

    Cash 3261.33. Income 433.33  Expenses 409.74.  Debt Repayment Dollars 23.59.

    Note: My expenses are mainly rent, gasoline, food, and student loans.  Having to move back in  with my parents cut out most other expenses.  

    3. Sacred Cows:  I refuse to sell the laptop, other then that I have nothing of value and no real limitations on work.

    4. Action plan:
    read Get out of debt book (done)
    get to acceptance stage  (done)
    ask Steve for help (done)
    establish goals (done)
    calculate budget numbers (done)
    Create Plan A (with Steve’s help) (not done)
    Create plan B
    Create Plan C
    Create Plan D
    Offer Creditors Plan A
    Figure out why I failed to do due diligence all that time, and increase my character.

    5. Disaster plan: Use the cash savings and get a temporary residence.

    Plan 1:  Continue working and living with parents.  Every month pay 146.41 minimum payment to Sallie Mae on the 10 year standard plan (I guess that’s what it is).  Add in an additional 23.59 DRD and specify it all to go towards the principle of loan 1.  After loan 1 is payed, pay loan 2.  After loan 2 is payed, pay loan 3.  The loans are as follows:

    3385.84 at 6% fixed loan 1.   FFELP
    4407.59 at 5.6% fixed loan 2.   DLSUB
    4396.93 at 4.5% fixed loan 3.   DLBSUB

    Question time:

    Is this a good plan?  What is the good plan?

    WHAT IS INCOME BASED REPAYMENT?  Could I do that and have a better plan because of it?  There is less then 20k coming into the whole household per year, and the calculator says I’d be paying $0 monthly on income based repayment.  Could I then take the whole $170 monthly (146.41 SL payment + 23.59 DRD) and apply it to principle of loan 1?  Some light on income based repayment would be appreciated.  

    • Looks like a great plan to me. I’m always so proud when people invest the time in researching good advice and implement it. I’m a big fan of your now.

      Income Based Repayment (IBR) is an awesome plan, for government backed loans. Private lenders don’t offer them. Another reason I HATE private student loans.

      I did notice that your FFELP loan may be able to be consolidated into a Federal Direct Consolidation Loan. If so, then that loan could be converted to a 0 monthly payment in an IBR. Please Contact the Direct Loan Consolidation Center for more information: at 1-800-557-7392.

      Let me know what they say.

  • I’ve had more time to get the facts, plan, and hassle with Sallie Mae.  

    Because I signed something called a “Master Promissory Note” I am responsible to repay the loans no matter what else may have been involved.  

    After the first payment my current balance is:

    3374.73 at 6.0%
    4400.17 at 5.6%
    4390.98 at 4.5%
    $12170 billing group

    I called Sallie Mae as to if I can put any extra payments towards principle.  The man said yes it would go towards principle because they would hold it and apply it to next months interest.  That is a less then satisfactory reply.  I am going to give it a ‘test run’ this month to see if they will apply it to principle on loan 1 at 6.00%.

    I found your ebook “Eliminate your debt like a pro” and am working on reading it.  Hopefully I can finish it when I get a day of work, I got the cashier job!  (to pay off loans with the income).

    I did my first try at an income / expense thing (although I need to read in further detail to figure out the debt repayment dollars stuff).  My total amount of cash in this world is 3451.33.  My income comes to 433.33 a month.  My expenses comes to 389.74 a month, leaving a 43.59 difference.  I was perhaps a bit conservative figuring my expenses, but they are not much considering I live with my parents.  I reckon the extra 43.59 could easily be consumed by unforeseen expenses, like poison ivy cream or draino or a higher then normal electric bill or increased gas price.  

    My current plan is to finish reading the ebook “Eliminate your debt like a Pro.”  In the mean time I will try to apply extra amount to loan 1 principle to see if it will work.  I am considering if gathering all the cash in the world and paying off the first loan is a smart move or not, it would leave me with 76.60 left in cash but one loan would be payed off.  However the situation living with my father is iffy, and if either of us were to lose our job or be injured or something that’d leave nothing to fall back on. 

    Other notes:

    My only real sacred cow would be my computer, for which I use at the public library to check emails and research stuff.  

    I am wondering if paying with a credit card or online payments would make my credit look better then paying by check.  I currently do not have any credit cards

    I am grateful for any help received.

  • Thank you.  

    I called SallieMae.  The only thing they were interested in was bringing my account up to date.  

    I don’t have a checking account or credit card.  So initially I was going to use a family member to send the payment by check to them to bring the account up to date.  It will cost 585.64, which I have in my reserves.  

    Basically he told me he couldn’t do much else until the account is brought up to date.  They had my wrong address and telephone number, this has been corrected.  I gave them an email address, to which he said he would send materials to help me when my account gets brought up to date.  

    From here on out it they want monthly payments of $146.41 monthly, and said lower payments were possible if my account gets brought up to date and we work something out.  It seems like a reasonable amount if my new part time Walmart Cashier job gets going, but will take like 9 or 10 years to pay off.  

    I called them back to verify what should be put on the check.  They were very vehement about paying electronically.  The new lady who answered informed me that my account was 81 days late, and at 90 days late it would be sent off to the creditors.  Paying by check was a bad idea as it’d take too long to process, thank goodness I called back!  My relative paid by credit card, I paid my relative that amount, and my account was brought up to date.  I feel like I just dodged a bullet. 

    Thank you so much for responding to me, I don’t know why but somehow I knew I should call them but your response was the cattle prod needed to get me to do it.  My fears of them pushing the loan forward into default turned out to be unreasonable.  

    Here is my current game plan: 

    First, I am going to try to get this part time Walmart cashier job going.

    Second, I am going to start paying by check through my relative the sum of 146.41 every month on the 23rd of the preceding month in order to get it processed by the 5th.  

    Third, I am going to start paying my father rent, along with gas expense and other various expenses.  I will take a count of all my money, and use a Microsoft excel sheet to track all incoming and outgoing money.  

    Fourth, I am going to put back any additional money that I can possibly save into my savings account, and try to build up enough cash to pay off these student loans all at once.

    Fifth, I’m going to continue to look for a better job or any chance of promotion within Walmart. 

    That’s all I can think of to do.  Is this the best plan of action?  What is the absolute best plan?  There may very well be many things that I have overlooked or simply don’t know about.  Also I’ve pretty much given up on receiving any help from the university to settle this.

    Thank you again for leading me to call them.

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