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Can I Get My Sallie Mae Student Loans Forgiven From My Public Service?

By on February 12, 2016

Question:

Dear Steve,

I had Sallie Mae student loan…it was sold to Navient which turned it into a private loan or so they tell me. We have tried the loan forgiveness or reduction twice with no results because it’s a private loan. The lender as so stated on his account site says “Navient Federal Loan Trust” How can this be a private loan when it says Federal…what am I missing? I also have one through ACS, which they won’t forgive. I have almost 10 years of federal service, so I need to figure this out.

Another woman asked the same question. So as you suggested, I went to the National Student Loan Data System. I found three loans:

1. FFEL Consolidated
2. Stafford Unsubsidized
3. Stafford Subsidized

Is there any way for me to receive forgiveness under the Public Service Loan Forgiveness Program? Any advice would be helpful.

Chris

Answer:

Dear Chris,

Thank you for writing me.

If your loans are listed on the National Student Loan Data System they are federal loans.

Maybe you do have some other loans that are private loans?

In order to be forgiven under the Public Service Loan Forgiveness program you must first consolidate them into a Direct Consolidation Loan. Payments made before you do that, don’t count towards forgiveness.

The good news is your loans appear to be eligible to be included into a Direct Consolidation Loan and you can drop the previous FFEL Consolidated Loan in with them when you consolidate the rest into a Direct Loan.

Once you consolidate them into a new Direct Loan then it will require 120 on-time, and full payments for you to be qualified for forgiveness. However, you can put the Direct Loan on an income contingent repayment plan and then reduce your monthly payment based on your income. You can use this online calculator to figure out what your payment would be.

READ  I Work in Public Service and Just Learned My Loan Won't Qualify for Forgiveness

These new smaller monthly payments would count towards the 120 required payments even if they are a reduced amount.

You might want to read about the pros and cons of the income driven plans.

So it sounds like if you start now, in another ten years your remaining loan balance could be forgiven under the Public Service Loan Forgiveness program.

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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.

2 Comments

  1. Concerned mom

    February 14, 2016 at 2:23 pm

    my son went to college for Graphic Art Design, upon graduation he found that he was educated on outdated programs. He has never been able to get a job in his field. His original program was around $60,000.00, he got a $7,000.00 grant which was signed directly over to the school, and I personally paid a $10.000, loan, he has paid at least $10,000.00 and after having to put some of the loans in forbearance while he pays off another loan he now has a total balance of $92,000.00. How is that even legal. when he first graduated college they wanted him to pay his loans back at $700.00 a month, which was impossible so he accumulated late fees and penalties even though he did make payments, just not the full amount. Now if he took his loans out of forbearance he would have to pay $900.00 a month. If he made 120 consecutive payments at that rate he would well exceed the amount of his original loans with interest. This entire plan is a scam, as a matter of fact the entire student loan system is a giant scam and should be Illegal.

    • Steve Rhode

      February 14, 2016 at 5:02 pm

      What school did he go to and are these private or federal student loans?

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