What is the Best Way to Get Rid of My Student Loans?

“Dear Steve,

I have a ton on debt. 36,000 in private student loans and 46,000 in Federal student loans. In 2010 I filed for bankruptcy and in 2012 I had brain surgery. I am now currently working and want to get this debt off my back.

How would you suggest that I get rid of it. Navient has agreed to settle the private for $11,000 and since I have a (technical) government job I can qualify William Ford act of a ten year repayment plan. I really want to either somehow completely eliminate the private and start making my payments to federal. or settle private for $4000 – $6000. What should I do?


Dear Ed,

So sorry to hear you’ve had some difficult life bridges to cross. But the good news is it seems things are looking up.

If Navient is offering to settle $38,000 of private student loans for $11,000, that’s a gift. It would be one of the better deals I’ve seen and you should strongly consider it.

On the federal student loans it would be smart to look into getting the loans on the income based repayment program to get you the current lowest payment you can get. After ten years of payments the remaining balance of the federal loans would be forgiven. For more information on this, read this.

Private student loans have few options. Many would drool for the chance to have a real settlement offer from their private student loan lender. You’ve got that in hand.

You indicate you are not currently making payments on your federal student loans either. Not working out some arrangement with on the federal student loan payments is not good. Nothing positive happens when federal loans get way out of control. You can find yourself having your wages garnished, tax refunds intercepted, or being sued by the Justice Department.

But you can take some positive action today. The Department of Education offers a number of alternative payment options that can significantly lower your payment and keep you current and in good graces. Just click here to find out what those programs are.

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Generally, the income based repayment program is a good one to look at if your income provides a significant payment reduction. Otherwise you might want to look at the extended repayment plan to keep your payments low for the ten years it will take to qualify for Public Service Loan Forgiveness and have the balance of your federal loans wiped away.

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.
Damon Day - Pro Debt Coach

Steve Rhode

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