I Can’t Pay Sallie Mae – Carlos


“Dear Steve,

Sallie Mae loaned me $10,537.50 on 08/31/1994. I started making payments on it in 2003. Have been in forbearance three times. I have already paid about $7,000 on this loan. he loan is on forbearance until 03/07/2009. Because of financial hardship I wanted to settle with Sallie Mae for $4,000. Total Principal to be paid $13,989.89, estimated interest to be paid during repayment $6,796.20. Estimated total I’ll be paying $20,786.09. PLEASE HELP!!!!

Here is the email I sent Sallie Mae on Monday:

To whom it may concern,
I have made my payments to date as best as I can. My loan is in forbearance until 03?07?2009. The company were I’m employed has had a 20? salary cut accross the board company wide. On top of that, it seems that the company might be closing real soon, it has already laid off 70? of the workforce. I feel that it’s just a matter of time before I’m let go. I would like to see if there is anyway possible for me settle on this loan for the amount of $4,000. This would be everything I have, but at least the debt will be paid off. Believe when I tell you, I have looked at every option to find the best way to settle this debt and not run the risk of defaulting on it in the future. I respectfully ask that you please consider my offer and let me know if this is feasible. Thank you in advance for your prompt attention to this matter – Best regards, Carlos

Here is their response which I received today:


Thank you for your inquiry and for your business with Sallie Mae.

Sallie Mae does not negotiate reduced payment of your outstanding balance. If we may be of further assistance, please visit our Web site at www.salliemae.com.

Customer Service

Is there any possible way to settle with Sallie Mae for less than the principal balance?


Dear Carlos,

Sallie Mae doesn’t need to settle on debt because they know that your obligation to them will survive even bankruptcy. Go bankrupt, they don’t care. They have all sorts of power. They can capture tax refunds, increase your balance by up to 40% as a penalty fee, and keep you treading water with no way to get out of debt.

Under § 523(a)(8) of the Bankruptcy Code, student loans are nondischargeable unless repayment of the loan would impose an undue hardship on the debtor. The burden of establishing undue hardship, by a preponderance of the evidence, is on the debtor. The Code contains no definition of the phrase “undue hardship” and interpretation of the concept has been left to the courts. In this Circuit, the applicable standard is the “totality of the circumstances” test as set forth in Andrews. In applying this approach, the courts are to consider: (1) the debtor’s past, current and reasonably reliable future financial resources; (2) the reasonable necessary living expenses of the debtor and the debtor’s dependents; and (3) and any other relevant facts and circumstances unique to the particular case.

The principal inquiry is to determine whether “the debtor’s reasonable future financial resources will sufficiently cover payment of the student loan debt – while still allowing for a minimal standard of living”; if so, the indebtedness should not be discharged. Bankruptcy courts are required to analyze a debtor’s student loans, and make a determination of nondischargeability of them, on a loan-by-loan basis. There is no authority in this Circuit for discharging only a portion of a particular loan. – Marie vs Citibank

I think the email response you got from them is fairly typical and I am sadly not surprised by it at all, even though Sallie Mae says they will work out individual repayment plans.

Sallie Mae does not offer an Income Contingent Repayment Plan (ICRP) that would allow you to repay your student loans based on what you can reasonable afford to pay. Just recently a judge ruled that because Sallie Mae failed to offer an ICRP option that a student would be unable to repay her student loans without undue hardship and allowed the student to discharge some of her student loan debts in a Chapter 11 bankruptcy which follwed a chapter 7 bankruptcy to discharge all other available debts first.

I’m afraid the news isn’t sunshine and lollipops when it comes to student loan repayment difficulties. I’d suggest that you talk to Sallie Mae about negotiating a monthly repayment that you can afford and if you can’t afford anything then go and talk to a bankruptcy attorney about a potential discharge of your student loans in a Chapter 11 bankruptcy because they pose an undue financial burden on you.


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See also  Is the Sallie Mae Class Action Lawsuit a Scam or Will I Get Money? - Vicki

26 thoughts on “I Can’t Pay Sallie Mae – Carlos”

  1. Salle Mae are nothing but scam artists!!! My student loans where with them originally and they screwed me when I was scrapping together $100 a month unemployed without benefits when I was getting regular on time payments to them and one month I got extra money and paid $500. They applied $100 of it as my payment and didn’t report the other $400 (otherwise they kept the change. They then jacked up my interest and then told me to pay $500 min. every month. I fast refinanced it and have been getting deferments for over 5 years now. I have been unemployed all this time and more and Sallie Mae bought my loans back again in July 2011 again against my wished and permission from Citi Bank. Federal Loans refinanced but the interest now is still way over what it should be. Sallie Mae also got into a lot of legal problems a couple of years ago for mistreating loans and adding extra fees and anything else they felt like and the feds came down on them but yet they are still getting away with scamming people. They on my loans back in November 2011 told me my new deferment would be for three years more but have never mailed me anything about my accounts. They refuse to tell me anything unless I pay them a $31.05 in a late fee from Citi that they have expunged and told me Sallie Mae has no legal right to charge me for only Citi Bank has the right to that fee!!! Sallie Mae should be fined for this outrageouse behavior and pay off my loans in full as a plenaltie of abuse and refussal to communicate with me about my account!!! It was written in the contract at refi that if my loan has to go to anyone else they have to write me and get written permission and the interest rate has to be dropped again and that was agreed upon but not honnored!!!

  2. I’m in the same situation basically. I owe Sallie Mae a little over 17K and right now I am in forebearance. What really makes me mad is that I got tired of getting laid off & being unemployed so I went to a small time business school, Wright Career College, let them talk me into a Medical Office course and qualified me for a student loan. They said “Medical offices, clinics & hospitals never layoff; always a demand’; and “they had great success in job placement”. Yeah, right. That was 2 years ago; I am now 61 yrs old. They never placed me in a Medical position; I am employed in a different field where I don’t make very much $. It was a waste of time & money. I have 10 yrs to pay off a student loan that I will be paying for after my retirement in about 6 to 8 yrs, of which I will be living on social security. I really have issues with the school. I think it’s sad that people are taken in by these rip off, con artist schools that make people think that they can change careers at their age and get jobs. They are borderline “false advertising”. There should really be a law against these small independent business schools, at least so they can’t give government funded student loans. If you want to go to school, and on a student loan, at least go to a major university or college.

  3. I applied for a loan as a co-payer for my son’s education through Sallie Mae. I was turned down and my husband co-signed for that semester instead. The following semester the original papers I sent were resent to Sallie Mae without notifying me or requiring my consent. I only found out when my son was out of college that Sallie Mae considered me liable. I am also very concerned that Sallie Mae combines applications with promissary notes in one document. How can anyone promise to pay back a loan they have not yet received? The Indiana Attorney General considered my personal case where I was turned down and the application resent without my permission as consumer entrapment. What can I do to get Sallie Mae off my back?

  4. Dear Carlos,

    My name is Michelle. My mother co-signed for my brother for a student loan with Sallie Mae. She’s paying a smaller amount then what they are asking of her. Due to the ex-stream amount that their asking, she would not be able to survive without losing her car, home, etc. They call every day and harass her about putting more on her payments, after they tell her that they will go after her paycheck. She becomes frightened and pays more then what she can, knowingly she’s unable to. Question. Even paying something on it, then to pay nothing at all is substantial enough, to not put her in delinquency or any other thing that follows the private student loan?

    Thank You, 

  5. How’s this for a repayment plan… sign up for all those dozens of credit card offers.  Use those credit cards to pay for your Sallie Mae loan (thereby paying off Sallie Mae).  Pay the credit cards as best as you can for a year or so.  File bankruptcy to wipe away all of that credit card debt.

  6. How’s this for a repayment plan… sign up for all those dozens of credit card offers.  Use those credit cards to pay for your Sallie Mae loan (thereby paying off Sallie Mae).  Pay the credit cards as best as you can for a year or so.  File bankruptcy to wipe away all of that credit card debt.

  7. Undue hardship will. The court will likely determine that, if after minimum payments to a student loan debt are made the debtor cannot maintain a basic standard of living, then a portion of, or all off, the student loan debt will be discharged. The word “reasonable” carries a with it a great deal of weight in any hearing or trial.

  8. Wait a minute. Sallie Mae certainly does offer an income contingent repayment plan. Please do your homework so you don’t misinform those who seek help which you claim to offer.

  9. Wait a minute. Sallie Mae certainly does offer an income contingent repayment plan. Please do your homework so you don’t misinform those who seek help which you claim to offer.

  10. Looks like I’m not alone, that is still little consolation. I owe 80k+ and have no job. I am out of deferments, and forbearance. The agent that I talked to (at least spoke english this time) offered no help. At the end of the conversation admitted that the only thing I can do is to accept that I’m delinquent. Even if I was to get a job teaching, it would take me 7 years to pay off my debt paying over half of my total, untaxed income towards my loan. I have $450/month of just interest! I feel completely without options and trapped.

    The thing about all this is that it’s completely my fault that I got so far in debt. And I was doing it out of a sense of responsibility. I though that if I got a degree from a highly reputable university, than I would be more likely to succeed, and thus make more, and the money I borrowed would pay off, and be a good investment. With the economy the way it is, I don’t really think I’m any more marketable than a meathead fresh out of highschool. Why was I never warned about the dangers of student loans? What ever happened to “good debt”? I’ve learned the hard way it doesn’t exist

  11. I currently also have 80k+ in students loans from Sallie Mae and would love to hear any advice from anyone. I currently pay 300 a month just in interest and I only make 30k and consider myself lucky that I was even able to find a job in the current jobs market. At my payoff calculation, I am going to end up paying Sallie Mae nearly the same amount of money they loaned me. I have looked into every possible option, but at this point, I’ve almost lost hope at ever having enough money to start a family. I’m only 23 btw, but I’m looking at how this loan is going to burden me in the long term. The sad part is when I signed for the loan, my parents had set it up for me and promised that they would pay it all back. Thy were well off but my senior year, my dad made a series of poor investments and they themselves went bankrupt. This is the bullshit that exists today. My parents declared bankruptcy being over 300,000k in debt and now they have a clean slate? I am just trying to start out in life and this is what I have inherited. I partially blame myself because I trusted the people who birthed and raised me? I know my parents do feel bad about it, but they really screwed me. It is hard for an 18 year old to make such a big decision about that. I didn’t understand how loans worked or the risk I was taking at the time. Hell, I trusted my parents. They alway told me a good education is priceless and they were wrong… dead wrong. Education in this country is a business. In High School my guidance counselors pushed me to just go to the best school I could get into. I was convinced it was a source of pride. No one ever told me that feeling cost me, possibly a normal American life. There needs to be grater awareness in High Schools about the predatory lending tactics of companies such as Sallie Mae. There should be programs that focus on this or something. I hate to see this happening to younger people jsut entering college and have no idea what they are getting themsevles into by taking out 100k+ loans. The sad part is, the many parents I’ve spoken to who went to college paid out literally fractions of what is expected of young adults today. The average pay off time of a student loan 20 years ago was 5 years. If I keep on track with my payments, I’ll be lucky to have this paid off in 20. I’m also single but I’d like to meet someone some day and get married, but who is going to want to marry an asshole with so much financial burden. I mean, I’m not the most charming guy, this girl would have to really dig me in ways that I could never understand. Anyway, I’m just venting.

      • Well, they are letting me live with them so I can make larger monthly payments and hopefully end this misery sooner than later, but it’s definitely an uphill battle. That and even if I wanted to get a place around where I live, I’d end up working pay check to pay check. They want to help, but my father never want to college and has survived all these years as an entrepreneur. His credibility as a businessman is ruined, he can’t get a loan to start a new business, and he has no real skills and yet is to proud to take any job he can. My mother got laid off from the bank she worked at and now works a retail job… so they’re just trying to make ends meat themselves. Luckily, my sister is intelligent enough to be making it through school on mainly scholarship money and financial aid. The difference is being made up with federal loans. She’s staying far away from Sallie Mae after my story.

  12. I am having the same issue that everyone is discussing. I am in debt to Sallie Mae for $80K+ and do not see hope in sight. I am attempting to find an alternative to outright paying the debt; some form of consolidation, anything. Right now they are requesting me to pay more than I currently make in a month and I am unsure how to accomplish the task. Any success stories of someone that found help and how to fix the issue, even a lender that was willing to consolidate the loans would be useful or a direction of someone to speak with.
    Thank you!

  13. The ultimate scheme, Bernie Madoff may look like child play compared to what the Bush administration did for the student loan industry officials and lobbyists in charge of the Education Department. Lenders such as Sallie Mae and Nelnet showered Congressional leaders with hundreds of thousands of dollars in contributions. The result was a virtually unregulated industry exploiting a federal program to enrich itself at the expense of students and the taxpayers alike. Lenders ballooned loan debt by compounding improper interest loan rates to the point of no hope for recover, short of death. They routinely violated a federal law forbidding lenders from providing, illegal inducements to colleges and financial aid administrators, loan companies push greed to exploit high levels of expensive private loan debt on low-income families and working class students who had little hope of paying it back. Their incentive was to let loans balloon, because if the borrower could not pay the taxpayer would have to cover the debt. The lenders didn’t care about the borrower, all they cared about was their end of the month numbers, and their ability to scheme the government at the expense of students and taxpayers. The student loan industry was one big fraudulent and deceptive scheme that is costing multitude of student and families hardship and disparity. Sallie Mae claims it must abide, under U.S. Bankruptcy Code 11U.S.C. 523 (a) (8). The only remaining basis for discharge is a ruling favorable to the debtor from an adversary proceeding, brought by the debtor, for undue hardship. I ask you, isn’t the testimony from thousands of victims that have been exploited by the student loan industry and a bias and discriminatory system, fortified by the testimony of the loan industry whistle-blowers, justifiable cause of undue hardships favorable to the multitude of victims? What authority, Congressional or higher can testify on the validity of why student loans should specifically be exempt from bankruptcy protection? Criminals and convicts in this country have more right to a debt free education than a struggling student whose only crime is their desire for a quality education. Where is the transparently of the difficulties and hardships, where are the Congressional Hearings on the student loan industry, where are the testimonies from the Whistle-Blowers? Why isn’t Martha Holler on the stand justifying who’s rules she must abide at all cost?
    Thank you Congress for taking the first step to rectify this injustice and put the interests of students and taxpayers first.


  14. I owe Sallie Mae approx. $140,000 separated into 4 private student loans at around 11% interest each. I’ve gotten a job in the industry that correlates to my degree, however since the economy crash the starting wages of my field have gone from 55,000 to about 30,000 which I am at. I’ve called Sallie Mae numerous times and all they will ever do is put my loan in forbearance, I’m only 22 and have no other outstanding debts but am seriously considering bankruptcy and undue hardship.

      • Undue hardship will. The court will likely determine that, if after minimum payments to a student loan debt are made the debtor cannot maintain a basic standard of living, then a portion of, or all off, the student loan debt will be discharged. The word “reasonable” carries a with it a great deal of weight in any hearing or trial.

        • Does this mean you can petition the courts? If so, would it be in District court filing a federal lawsuit? As you know, District Court handles both civil & federal cases.

  15. Sallie Mae…. I am in debt to sallie mae since 2005. I havepaid and paid and also gone into forbearance and paid lump sum payment and i still owe them as of today 19,000.00 when the loan was originally for 16,000.00 Talk about nuts.. this is crazy. I have heard however that Sallie mae is now a privately owned company and not owned by government. Does any one know anything about that? A hamster in a spinning wheel.

  16. The capacity to make future loans depends upon past loans being paid. It is important that student loans be available, so it is important that student loans be repaid. I benefited from student loans and I paid them back. Now, I have students who have loans, and I am confident that they will pay them back. Sometimes events such as health set backs will cause a delay; there are accommodations for this. Also, there are people who have used student loans fraudulently; there are criminal remedies for this. My view is that the student loan program works well enough as it is.

  17. We constantly hear the media proclaiming, “if you are having finical problems call your lender and ask for help they will work with you”. We have called Sallie Mae numerous times and begged for help with student loans. We have begged for some relief, a reasonable repayment plan, a negotiable alternative but all Sallie Mae will do is put your loans in forbearance and continue to balloon the debt by compounding interest on top of interest at a fourteen percent or higher rate until there is no hope of recovery. Sallie Mae stated that none of the debt was dischargeable through bankruptcy. So Sallie Mae has got cha and they are going to milk you for all it’s worth. Martha Holler of Sallie Mae reply is “We don’t make the rules, but we do follow them”. She could care less about the fact that Sallie Mae is turning a student”s yesterdays dreams into todays student loan nightmares. Former Sallie Mae debt collector, Michael Zahara stated on “Now on PBS”, “Sallie Mae debt collection agents use dubious tactics to force students into what’s called forbearance. Sallie Mae has a incentive to let loans balloon, because if the borrower can not pay the taxpayer would cover the debt and since Sallie Mae allows FELP loans to stay suspended for years, Zahara has seen loans double in size. Sallie Mae even put loans into forbearance without borrower permission. Sallie Mae doesn’t care about the borrower, all they care about is their end of the month numbers. According to the Federal Education Department, in 2009 the amount of outstanding federal student loan debt is $544 billion and increasing by the day. Where is their bailout? Where is their recovery plan? Where are their options. They have none! How can it be that the big corporations, the banks, the credit card debt and all other debt in this country is negotiable or dischargeable through bankruptcy, except student loan debt? I ask you isn’t that discrimination against one group of people, and is it being supported by the the government? Ask Martha Holler of Sallie Mae her answer is,”We don’t make the the rules, but we do follow them”.

  18. Dear Steve,

    I am having the same problem as Carlos on a bigger scale. I have a BFA majoring in Digital Design. I also have an Associate in Business Communication with honers. Beleive me, what I have been going through does not feel like and honer. Most companies want interns, entry level employees or they would rather pay to train someone to do graphic design then pay someone with a degree. Consequently, students end up making less money than people who did not go to college because of student loans.

    I had to drop two online classes do to computer lock ups, spyware and even parasites. I wrote to the financial aid department, my professors, and the academic advisors for extensions but they chose to put an F on my transcript for dropping and replaced it with an R when I resolved my computer issues out of my pocket and picked the classes back up. Other students were being given extensions to take vacations etc… In any evet, my transcript is a mess and I am paying an additional $16,000 to Sallie Mae at high interest.

    By the time I pay it off it will total over $74,000. I tried the Chapter 11 route and was turned away.

    Thanks for your time,



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