How Can I Reduce My Student Loan Balance?


Dear Steve,

I have taken out loans to pay for college. Several of them are from Sallie Mae, which is now Navient. Over the past 20 months, I have been unemployed for 14 of them. I was initially laid off in Sept of 2014, and again in Oct of 2015 my 6 month contract ended with another company. I have had a hard time paying my loans ever since I finished college in April of 2010. One of the Sallie Mae loans was cosigned by my wife and after paying the interest while I was still in school and making regular payment which have calculated to more than the principal, we still owe almost the entire principal amount on the loan.

Is there anyway to get rid of, or reduce student loans amounting to over $200,000?



Dear Dean,

I did have to chuckle when your email address is your old school account. Yes, that school has had a lot of issues and ongoing lawsuits.

Since at least one of the loans was co-signed I’m assuming they were private loans. If theses were federal loans you’ve got some options to deal with them like this and this.

If these are private student loans then there is not much you can do but default or pay the interest payments.

A final Hail Mary approach can be found in this article and this one.

There are options for finding some relief for unmanageable private student loans. However, none of that possible relief is either easy or automatic. You will have to invest time, effort, and probably some money to either educate yourself or hire someone to assist you with the loans.

Expert assistance can be found from a attorney who is licensed in your state and who is knowledgeable about student loan problems, an experienced debt coach like Damon Day or some other person or entity you may locate.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
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I also typically reroute people back to their loan servicer to talk about what options may be available but I’m just disgusted these days with how much bad advice the servicers give.

I think you need to always remember that a private student loan is really just a regular loan and is completely different from any benefits you might hear about for federal loans.

And while the private student loans, up to what was an “eligible education expense” is protected in bankruptcy, after default and the passage of the statute of limitations, you may no longer lose if you are sued. You would however need to raise that as a defense even if they do elect to sue you.

From my point of view, private student loans are the worst type of modern debt to have. If you took out a loan to buy a crappy car, at least you’d have some asset to sell and get out from the debt, at least partially.

But when it comes to student loans, it is a debt that has no asset behind it unless the debt was used for a degree or education that benefits you.

I took some time and explored the complexity of the student loan problem and its multifaceted team of players in Why Defaulting on Private Student Loans is Not as Crazy or Irresponsible as it Sounds.

Damon Day - Pro Debt Coach

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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.
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