Should I Deal With Sallie Mae Directly to Settle My Student Loans? – Kris

“Dear Steve,

After graduating in 1996, I owed Sallie Mae about $17000. Over the past 16 years I have worked as a special education teacher, coached, worked with autistic kids, been a lifeguard, waited tables/bartended, worked as a travel agent, done landscaping and currently install solar panels.

Although I have had periods where I consistently made payments to the above lender, I have also travelled extensively and defaulted on the loan. I now owe roughly $23,000 from accrued interest.

Recently my parents had to sell my grandmother’s house and decided to give each of us kids a portion of the sale. I plan to pursue debt settlement through a lump-sum payment and after talking with a few different collection agency representatives learned that it will be difficult to negotiate beneath the original principal of $17000.

Should I attempt to deal with one of the collection agencies who have seen my debt or should I talk with SallieMae directly to offer a lump-sum settlement?


Dear Kris,

Frankly I’d try both. Talk to the collection agency and Sallie Mae. The key is who is willing to give you the settlement agreement in writing before you pay the lump sum.

But settling student loan debts is trough because student loan lenders have a wide latitude of powers to collect, including administratively garnishing wages.

The good news here is you’ve got cash on hand to settle and that is a much stronger position to negotiate from. You might want to contact a DIY debt settlement company like Consumer Recovery Network and hire them to coach you through the process so you know what a current best deal is. Their fees are among the lowest in the debt settlement industry for this type of help.

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


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