I’ve Never Been Late But Want to Settle My Navient Student Loan


Dear Steve,

I have a federal student loan being serviced by Navient for putting three kids through college. The original balance was over $90k and have been paying back for 9 years and now have a balance of just under $80k. I have never been late or missed a payment. I have spoken to two different Customer Service people (I assume at a foreign call center) to inquire about a settlement and both said we don’t do that. I have excellent credit and really don’t want to risk that by falling behind in order to get a reduced settlement.

I have the money to pay off the balance but wondering if it is worth it, to try (if it is even possible) to get them to settle for a lesser amount?



Dear David,

Well your options are very clear. If you don’t want any negative history reported about this debt, then pay it in full or as contractually agreed.

If you don’t mind taking a credit hit then stop making payments until it get 5-6 months behind, face being sued over the debt, and then try to negotiate a settlement. With no experience, I would expect 50%-70% settlement offer when you get to charge-off.

There is no magic wand here. Settling can be a good strategy when demanded payments are not possible. See this article.

All of this only applies to a private loan serviced by Navient. The same process does not apply to federal loans which typically don’t settle for less unless you are sued by the United States of America over the debt or you file bankruptcy and then file an Adversary Proceeding because repayment them would constitute an unfair hardship.


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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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