How Can I Settle My Federal and Private Student Loans for Less? – Trevor


Dear Steve,

I went to college on and off forever, I accumulated a massive amount of debt. With interest a 104,000 dollars. Ive been great at paying them living a simple life…. I’ve currently knocked them down to 28k.

So my question is I currently have private and department of Education loans. Is there anyway to offer a lump some cash offer and get a discount on them. Example I give them 20k and they knock off 8k so I can pay it off now. Is that even a thing? I have two jobs right now really trying to pay these loans off. Any suggestion / help would be great!!



Dear Trevor,

On the federal loans there are easy opportunities to settle them. The government has all the power and no motivation to get paid faster. However, I have seen them settle when the government sues debtors or there is a compelling case for undue hardship through a bankruptcy Adversary Proceeding.

The private loans will settle but not before inflicting pain. Depending on the lender and the program at the time some private student loan lenders like Navient and Sallie Mae will settle once you are 90-120 past due. This approach exposes you to being sued, wage garnishment, bad credit, inflated balances, etc. Defaulting is best left as a strategy for those who have no other choice. See Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan.

The best way to dispose of the debts at this time and pay the least amount of interest and have the smallest amount of risks is to power through and pay them off in full.


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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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