Navient Student Loan Collection and Interest Charges – Losing Income
My spouse had a loan taking out through Sallie Mae for school purposes back in 2006. Not sure what the original amount was on that loan, but right now she was issued a garnishment order by the state of Colorado in order to pay of the loan, which according to the documentation received is over 10,000 dollars. My wife works nights at Wal-Mart and I am in the military about to move to Germany for relocation.
My wife will obviously loose her job, and be unable to pay off the loan, not even making a dent because of the interest accumulating. This will happen within the next 6 months.
Can interest still build even after loosing her job? It will never be paid of unless I will the lotto or come up with cash for a settlement. I'm just worried that the interest will accumulate making it impossible to pay the student loan off.
Can interest still build up on a collections loan even after loosing an income source? How much will Sallie Mae or Navient accept as a settlement?
—Horacio
Short answer
Private student loans, like those obtained through Sallie Mae and serviced by Navient, come with few options. Settling one is possible, but the savings are smaller than on credit card debt, and a wage garnishment makes a settlement much less likely for as long as it is running.
Key points on this page
- A private student loan affords you little in the way of payment options, and when payments are not being made the balance grows from interest, often at a significant rate.
- If the loan has not been consolidated through a government program, look into whether it can be. It may need to be brought current first.
- Government backed loans open up alternatives a private loan does not have, including income based repayment.
- While a garnishment is in place, settlement is less likely, because the servicer keeps getting paid for as long as you hold that job.
- Once the garnishment is removed, or stops through a job loss or a job change, settling becomes possible with planning and available cash.
- Savings on private student loans are generally not as good as on delinquent credit cards. Expect somewhere between 20 and 50 percent off the balance, and do not treat less than half as a realistic target.
Unfortunately, at least for the time being, there are not many options for private student loans like those obtained through Sallie Mae.
Navient Student Loan Collections
If the loan has not been consolidated using some of the government loan programs available, consider looking into this option. The loan with Navient may need to be brought current before it is eligible for a government loan consolidation.
Why would you consider this? You are stuck with a loan that affords you little payment options. When payments are not being made, the loan grows from the interest being charged, often at a significant rate.
Having government backed student loans means more payment alternatives, like income based repayment plans (IBR).
Settling a Private Student Loan Debt for Less than the Balance Owed
There are options to settle a Sallie Mae loan. While there is a garnishment, settlement is less likely. This is because Navient will continue to get paid as long as you’re at the job. With some planning and availability of cash resources, and once the garnishment is removed, or no longer applied due to job loss or job transition, settling a Sallie Mae student loan is possible.
The settlements on private student loan debts are generally not as good of savings as credit card bills that go delinquent. Depending on the circumstance you may only save 20 to 50% off of the balance owed on student loans being serviced by Navient. I am seeing some signs of better settlement offers on private student loans, just not enough of them to call it a trend, or to recommend negotiating for less than half of the balance as a realistic target.
I realize that may not be helpful right now, unless you were able to identify a source of cash that would allow you to settle the student loan shortly after the job loss. But I am pointing this out to show that even saving up money over time to settle the student loan is better than no options.
I wish I had better feedback to share. But there are just no great options for dealing with unmanageable private student loan debts through Navient, NCSLT, Great Lakes, and other private student loan collectors right now. That may change in the future. The student loan debt crisis is still growing. Recent reports show that over 10% of government backed student loans are in some form of delinquency. Private loan default numbers are terrible too. With the spreading awareness of the student loan bubble popping I do expect more options on private loans in coming years.
Update: I recently interviewed Andrew Weber for Debtbytes. If you are dealing with Navient, or any private student loan servicer (or debt collector), take the time to play the video. You can get feedback from Andrew in the comments below.
Anyone struggling with a Navient private loan, or any other servicer or debt collector, is welcome to post comments and questions below for feedback and resources in response. If you would like to discuss your options for settling student loans with a professional you can call 800-939-8357, and choose option 4.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
my spouse has a situation with a private student loan through Sallie Mae. They are asking for a month amount that we cannot pay because it is only a 15 months and the total amount doesn’t go down much with each payment. they keep calling asking for payments and now say that it will go to charge off where they can sue, garnish etc. I cosigned on a used car loan for my spouse, can they come after me or take the car? what is the likelihood of letting the private loan default and see if they offer a better payment option than what Sallie is currently offering. There is another private loan my spouse has that only takes $40 a month even though is a $50000 loan and is going down with each payment. Sallie mae wants $230, we can’t do that and live our lives. the lowest they’ll go is $180 somehitng but only for 15 months and the amount won’t go down a bit. What is the likelihood today for Sallie Mae to sell their loan, is the charge off selling the loan or just another department that sallie mae has to come after the money. how soon till they can garnish anything? Im in the state of NY Does anyone have a comment on this?
Hi, one thing to keep in mind is that Sallie Mae/Navient talks a big game about vague “legal action” etc but they are mostly all bark and no bite.
This isn’t North Korea – they can’t just take your house. All private creditors must first obtain a judgment and then execute that judgment in order to garnish wages or get a lien or bank levy. There are so many options to negotiate a settlement or payment plan before that happens.
A private creditor can only take you to court after they’ve exhausted other collection measures and they must hire a collection attorney in your state to do so. Even then, there are options to settle or get on a repayment plan. I recently settled a Navient/SLM account with a “same state attorney” for 40% paid out over 5 years. They don’t want to sue you, they want to make a deal. Lawsuits are their favorite threat but in reality occur very rarely.
Federal loans can garnish wages without taking you to court, but private lenders can’t. Any good consumer defense attorney worth their salt can prevent a default judgment in the rare instance that they do take you to court – but you don’t need an attorney to negotiate a settlement prior to legal action taking place.
In my experience, the vague threat of “legal action” is one of Navient/SLM’s favorite collection threats, but they only take actual legal action when all other options have been exhausted. Other private lenders such as NCT are more aggressive, but their accounts can still be settled.
Whether or not you choose to strategically default to settle is a decision only you can make – it comes with a heavy price as far as credit damage to you and any cosigners. But for some borrowers, the possibility of a significant settlement reduction is worth it.
Navient/SLM rarely sells their private loans from what I’ve seen, they just contract with collection agencies to try to collect – but they still retain ownership of the loan, even years later. However, settlements at 50% or less of the balance can be possible, and they often agree to structured settlement terms that go out to 1-2 years or even more.
When your account first charges off (defaults) after 180 days of nonpayment, Navient will hold onto it for several months and try to collect via their Internal Recovery Department. This is an ideal time to work out a settlement and avoid the possibility of legal action.
If you can learn to ignore the phone pressure and vague threats leading up to the charge off, then a settlement can be a definite possibility for defaulted Navient/SLM private student loans. As far as the decision to default on purpose, that is something that only you can decide – no legitimate financial professional will tell you to default on purpose. But many borrowers find that is the least painful (and least expensive) route to knock out their private student loans.
Disclaimer – I am a credit counselor who negotiates private student loan settlements on a regular basis. I am not an attorney and I cannot give legal advice. This response is just a collection of my personal observations and should not be construed as legal advice.
Sallie Mae is a disorganized, unprofessional, flaw-filled poor excuses of a company with scum for workers. Here is my story. They made major changes on my account without my permission. Changes that were wrong. They also completely ignore a letter I sent them telling them I was moving abroad for one year to take part in a volunteer program and requesting a deferment. When this happened I had already graduated from a 4 year university and was about to begin payments as it had almost been 6 months. As I was planning to go abroad for one year to take part in a volunteer program, I sent them a letter telling that and also asking for a one year deferment. On the phone call I made they sure enough confirmed the deferment for one year and receipt of the letter so I thought I would be fine as I would be back in one year. Little did I know that they had made major changes on my account that had nothing to do with the letter I sent them. What happened was I had taken a summer school class at a community college that summer I was planning to leave the country. So at Salliemae they had completely changed everything, specifically changing my status back to being a student that will be graduating all over again but this time from a community college, hence the deferment they granted, completely unrelated to my real plans and not the deferment I was asking for in the letter sent , the letter they chose to completely ignore. So I go abroad for one year just to come back to a tarnished credit record. Their system of relying on whatever information any school sends for them to make changes on borrowers’ accounts without permission is ridiculous and flawed on so many levels. Those changes were wrong and did not reflect my status and plans. Be careful if you have to use Salliemae as a lender. They will make major changes on your account without notification or verification, and they will completely ignore letters you send to them, even letters with vital information telling them you are moving to another country and need a deferment. In trying to get this corrected I also ran into some real scum. Some workers at Salliemae need to be fired and an overhaul needs to take place with this poor excuse of a company. Workers there are careless, unethical and won’t really want to help you. Best not to deal with this unprofessional, disorganized and flaw-filled company, so if at all possible I would advise any potential borrower to borrow from a different lending company. Better yet, all borrowers should come together and not pay them a penny more. Do a mass default to force this criminal company out of business. They can’t go after everyone.
Your experiences are very common and I have heard the same types of issues from many borrowers with both private and federal loans. Sallie Mae got such a bad reputation that they rebranded themselves as “Navient”, and then promptly got investigated by regulatory agencies under their new name as well.
The mass default is a common idea among student loan activists, but I have yet to see how it would be possible to coordinate it to make it happen.
my spouse has a situation with a private student loan through Sallie Mae. They are asking for a month amount that we cannot pay because it is only a 15 months and the total amount doesn’t go down much with each payment. they keep calling asking for payments and now say that it will go to charge off where they can sue, garnish etc. I cosigned on a used car loan for my spouse, can they come after me or take the car? what is the likelihood of letting the private loan default and see if they offer a better payment option than what Sallie is currently offering. There is another private loan my spouse has that only takes $40 a month even though is a $50000 loan and is going down with each payment. Sallie mae wants $230, we can’t do that and live our lives. the lowest they’ll go is $180 somehitng but only for 15 months and the amount won’t go down a bit. What is the likelihood today for Sallie Mae to sell their loan, is the charge off selling the loan or just another department that sallie mae has to come after the money. how soon till they can garnish anything? Im in the state of NY
Please see my other reply below, in addition:
Sallie Mae / Navient will definitely take a settlement after loans are in default. They threaten to sue and garnish often, but rarely take people to court. You have the opportunity to settle many times in the collection cycle before that happens, and it’s typically a last resort after all other options have been exhausted as far as collection attempts. However this is their favorite threat.
They cannot take your car. If they were to get a judgment by you not defending a lawsuit, then they would most likely just try to levy a bank account. Which is not good, but they aren’t going to come after your personal things and make you sell them.
Charged off loans typically settle for between 30-50% depending on how long it’s been since the charge off.
If they do try to take you to court, a good consumer defense attorney who has experience with student loan debt can easily stop a judgment and work out a deal during the legal process. The best student loan attorney I know in New York is Simon Goldenberg, he has a great deal of experience defending and settling student loan lawsuits.
I apparently consigned a student loan (can’t prove I didn’t) but this person I apparently cosigned for never paid his sallie loans and then they were charged off. The total for the three loans are about $15,000. Is there a way I can get this off of my credit report? Will sallie mae accept a payment to remove my name from this? I don’t believe I cosigned but this was many years ago and I did do a $1,200 consignment. Been battling this for years saying I didn’t know it was mine or think it was. So any advice about police reports or proving I signed is wasted time. Been there and tried that. So now my focus is to see how little I can pay to have this junk off my credit report. Any help????
It depends on when it charged off, but Sallie Mae/Navient settlements between 30-50% are possible.. the lower end of that range would be after an account has passed 1-2 years of nonpayment.
In a lot of cases, you can do a structured settlement with them over time, which is easier for many borrowers than paying a lump sum. Usually you get a better deal with a lump sum though
My wife has two student loans consolidated with the Direct Loan DOE totaling $60,000, they were transferred to Sallie Mae last year who now has their own DOE service. She is in IBR and as she does not work, does not pay monthly payment. I have ability to pay about half if we can do a lump sum settlement, what is the best coarse of action… let the loans go into default, not pay them, let the collection agency call for a while, make them an offer?
Hi James, on federal loans, they will not take a settlement when the loans are current, and the default fees are exorbitant and often outweigh any of the limited settlement savings on federal loans. Strategic default can be a viable option for private loan borrowers, but not for federal loan borrowers.
I think the best bet is to stay on IBR, recertify every year, and go for the 25 year forgiveness.. that is more realistic than a major reduction via settlement on federal loans.
Hello,
This is rather very long, however I though best to included the factors in my situation, in hopes for advice that best fits. Thank You
My total original student loans were $70,000, 12 years ago. (about private $55,000, and $15,000 in federal, between Sallie Mae and American Education Services). I did use up all my deferment and forbearance, but other wises made payments mostly on time for over 10 years. And I currently owe the same amount. Not a dent. I never was able to find a job that pay as much as what I was told was out there. I’m not saying just that I could not obtain, I’m saying I haven’t found them to even exist. I have been unemployed for the last 18 months. I highest paying job I had was about $25,000 a year, but I found that to be rare, and unavailable. I am a few years away short of turning 50. I, with the help of friends and family (some with good financial and planning experience) have evaluated my current situation, family, all expenses and short of winning the lottery, I can not repay these loans before, or even after retirement age.
I researched student loan bankruptcy, including several court cases, I found a few where the situation was very similar to mine where most of the loans were dismissed. I called over 100 lawyers, some that advertised student loan bankruptcy, and every single one of them said that it can not be done period. No one even asked my situation.
Sallie Mae $25,000 private loan, my mother co-signed, she is now retired and living on social security, The only thing she has is her house and we are afraid that Sallie Mae will take it. She has a reverse mortgage on it and already used almost half. This is past a few months past due, I recently borrowed money to make a payment, but it’s still past due.
A.E.S. private is about $30,000, my wife co-signed for that. My brother lend me the $ to keep this current, because they threatened to garnish my wife’s wages.
Before I finished school, we bought a house. Which now is an upside mortgage, it is worth less than half of what is owed. All payments were interest only. If we lose the house, we have nothing, our credit rating is shot, and will be till we’re almost 60, no one will even rent to us due to our credit and we have 3 young children. (we have 2 adult children, but they are unable to help, nor will they for quite some time) With the house, kids, and what work we had, we struggled most of the time, family loaned us a lot of money for us to get by.
We are about file for bankruptcy, the regular kind, not student loan. Our credit is already ruined. And we have separated, since last summer. We have not filed anything with the courts yet, but some told me that if I haven’t lived there after a certain time, we are considered legally separated. We have separated our expenses. My unemployment benefits stopped last December. I was just approved for medical and a small amount of food stamps. Although I still need to cover most of my kids meals.
Sallie Mae calls 8 times a day, I talk to them almost daily and made a payment 4 days ago, yet they still leave messages, and tell me directly that “They made several attempts to contact me to no prevail, I need to talk to them at least once a week, but I don’t (Again, I talk to them almost daily), there’s been no activity on my account and I “refuse to pay” (??? One, I just made a payment 4 days ago, and Two, I have no money, and when I can borrow some, after I feed my kids, I do make payments.) Yet continue to use those words. One Sallie Mae rep told me the other day that after 210 days, my loan would go in to default and that my entire balance would be completely charged off. I asked about it moving to a collection agency or any company or department that I would need to pay, she said flat out “no” ” it will be wiped out completely with nothing remaining at all anywhere, except the damage to my credit rating for a decade, but she swore it was no worse than bankruptcy, and since I was going to that anyway, this sounded like my only option, except now that another rep told me “no sir, that is wrong, any number of things could happen” but she refuse to say what those things are.
This is typical conversations with Sallie Mae the last 5 years, one say “absoluty YES”, another says “NO WAY” and another says “maybe, I don’t know”
THANK YOU FOR BEING PATIENT…
Any advice???
Mark H.
Hi, I understand the difficulty in getting accurate information from reps at Sallie Mae/ Navient. They are incorrect that the loan will be “wiped completely”. There will be a collection agency or Navient themselves trying to collect on it after it charges off.
Settlement could be possible but it sounds like you may not have the funds for that.
If you pursue bankruptcy, you’d need to file an Adversary Proceeding to try to have the loans discharged. An attorney who specializes in discharging private loans is Joshua Cohen of CT, and he also has a 50 state map on his website that shows attorneys in different states who have student loan experience. That may be something to check out if you’re trying to discharge these in BK.
Sometimes, settlement can be split up over 2 years or more on Navient and AES private loans, which makes it more accessible for some people instead of having to come up with a lump sum. Sallie Mae/ Navient also has payment plans for charged-off accounts, but I am not a fan of them because they keep the account in a perpetual state of default.
Hello,
I currently have 3 loans with Sallie Mae, dating back to 2001. The total cost of all of my school loans is $65,000. Since graduating college, I have never earned more than $20k/ year, so I started out getting forbearances on those loans, but then Sallie Mae told me I was no longer eligible for forbearance. Each time I tried, they told me it would cost $150 (if I had that money, I would have put it toward my loans), so I defaulted on all of them. They went to collections. I have been paying on them consistently since 2009, but on my credit reports, Sallie Mae has been reporting every single month as “CHARGED OFF”, which I read is the WORST thing to have on your credit report, and I now have a credit score of 585 (very poor). Do you know why they are reporting it that way, even though I’m paying on it?? And do you know if there is anyway I can have them change the way they are reporting? Thank you
Hi Heather, from your description I can tell that these are private student loans. Once Navient/Sallie Mae private student loans have charged off after 6 months of nonpayment, they will continue to report that way even if you are making payments on them. Navient/Sallie Mae has no mechanism to bring charged off loans current even when you’re making payments.
The good news is that you may be able to settle your loans for less than 50%, and pay that amount over 1-2 years or more. That may be the fastest and least expensive way to get rid of these if you can afford it. By settling, you will improve your Debt To Credit and Debt To Income ratios. and most importantly the charge-off notations will be changed to show that the accounts were “settled for less than the full balance”, which is much better than a charge off.
Does anyone know the SOL laws in California? I can no longer make payments for my private student loan with sallie mae which totals 60k and they are most likely sending me to collections. What should I expect when that happens? Will they take assests if I have any?
For SOL questions it’s best to consult with an attorney in your state since so many things can affect SOL. In general, SOL for unsecured debt in CA is 4 years, but it all depends on where the loans were originated and is a question best addressed to an attorney regardless.
Trying to run the loans past SOL is not the best strategy for many people, especially if you have a larger loan balance. The private lender may try to sue you well before that happens. For example, one private lender known as “National Collegiate Trust” regularly files lawsuits within 1-2 years of nonpayment. Other lenders like Navient/Sallie Mae are less aggressive, but it’s still a roll of the dice.
Instead, you may want to try to settle the loan either on your own or with the help of an experienced negotiator who understands Navient/Sallie Mae’s collection cycle and can help you get the best possible settlement. In many cases, Navient/Sallie Mae will settle for less than 50% and structure the settlement over several years, but they don’t make it easy and there are many pitfalls to avoid during the process.
My husband took out federal student loans for our two children to get their degree… After all was said and done the total of all loans was. $100,000., which we consolidated into one huge loan.. My husband worked for Fannie Mae and when financial crisis hit , they were laying off people and he lost job.. Has been employed as contract employee off and on since that time.. Several lengthy stretches of unemployment.. We have mort to pay and we had to put sallie Mae loan in forebearance several times.. We have used up savings and retirement and had to claim bankruptcy but kept our home .. Of course student loans can’t be included in chapter 7. Income based plan isn’t option because they ask for last years income and that doesn’t give clear picture of our situation.. Our capitalized interest has added approx 50,000 to our loan amt !!! Which of course that makes payment higher and round and round we go.. I have heard that in certain situations sallie Mae will at least allow part or all of loan balance to include in bankruptcy . If you can prove it puts severe hardship on living .. Do you know anything about that or do you know if sallie Mae will ever forgive some of the huge capitalized interest portion of our loan balance.. Do they ever use common sense in looking at a borrowers unique situation? Any advice or ideas would be greatly appreciated ….
Good news – you don’t need to use last years income for IBR – you can use your two most recent pay stubs. If you are married and filing jointly, they will go off of your combined household income.
Also, there’s a new payment plan out called RePAYE that has even lower monthly payments than IBR. However, with both these plans the interest can grow over time even though there are some limitations on interest accrual built into the payment plans. Even though the remaining balance is forgiven after 20-25 years depending on the payment plan, you could be stuck with a large tax bill after the remainder is forgiven. However, I think getting on one of these plans is much more preferable than doing forbearance or deferment for years; or even worse, going into default.
I went to college from 2004 to 2009. My loans are with Sallie Mae and initial amount was 42,892 and now they are balanced at 64,161. The loans went up 21,269. (one loan went from 8249 to 16281- went up 50%) My payments were deffered for 6 months then at one point I didn’t make payments for 6 months. I’m not sure if that’s why they went up so much. It just doesn’t seem right and they have no answers for me. Thank you
they are private loans not Federal
Hi Sesar, this is unfortunately the case with many private loans. I have a recent client who paid 15,000 in the last 4 years – only to see her balance grow by $10,000. Navient/Sallie Mae makes hundreds of millions of dollar per year, and after working with many private loan borrowers I’m beginning to wonder if these loans are designed to be paid down at all.
One option you could consider is a strategic default in order to settle them for less than half of the balance. I’ve been able to routinely settle Sallie Mae/Navient private loans for less than 45% of the balance, with payments structured on the settlement out to 1-2 years.
However, you have to essentially sacrifice your credit for 1-3 years in order to do that. They just won’t settle if you aren’t significantly past due. It’s a tough, adversarial process; but if you execute a sound negotiating strategy settlement is possible. Only you can decide whether or not the benefit of settlement outweighs the negatives of credit damage which can take several years to rebuild. Because Navient/Sallie Mae is so inflexible with payment options, I’ve spoken with more and more borrowers in the last year who are deciding to take this route in order to settle – there just aren’t many other options.
Michael- My DTI is round about 30%
If that 30% DTI includes all of your bills (rent, utilities, etc) you are in good shape from the new ability to repay rule angle. If Ameris Bank does not do FHA loans (not all lenders and brokers do), find someone who does and start talking to them about your situation.
Thanks I will contact other loan officer, but will that affect my credit score when they run my credit?
Hard pulls do. But you do not need them to do that initially. Just talk to them about your situation with all of the accounts you recently settled, disputed, brought out of default, etc. I expect they will have some suggestions about any further things to accomplish to set yourself up for success, and also a better timeline to approval with FHA than I could speak to. But I think you are a couple months away from approval based on what you shared in the comments.
I am currently working with Ameris Bank. On my credit report I have some other things that was delinquent, I am currently working with Lexington Law Firm to repair my credit. As for my Transunion report…see the below results
Removed
RECEIVABLE SOLUTIONS INC xxxx8788 Collection (old cell phone bill)
ULTRA VX NEW MILLENIUM xxxx3067 Charge Off (prepaid credit card)
UNITED STUDENT AID FUNDS xxxx5397 Collection
SCA COLLECTIONS INC xxxx7564 Collection (hospital bill)
Negative Remaining
COMENITY BANK/MTROSTYL xxxx9838 Settlement Accepted (retail credit card)
[EDITED – removed negative credit reporting Sallie Mae loans already referenced above.]
WORLD OMNI FIN- RETAIL xxxx2843 30-day Late Payment (joint account car payment)
Hope this gives you a better picture.
Jonika – It does offer a better picture. Do you know your debt to income ratio?
So with that being said, do I need to cancel my membership with Lexington Law? If that is the case, how will I be approve to buy me a home with all those negative items on my report.
Jonika – You mentioned trying to buy a home already. Is your goal to buy a home right away, after the school year ends, some other time frame?
Michael I am 30 years old and I have been out of school since 2009. I am trying to buy a house now if I can, because I am tired of renting.
Okay. You may not qualify for conventional home loans with those credit scores, but are not far from being able to meet scoring models for an FHA loan. I cannot speculate with any confidence with what little I have to go on from your comments, but if those student loan debts were the only negatives on your credit report, and with the recent resolution you reached, you could be just a couple/few months from being able to meet scoring guidelines (there are exceptions even now). There are new “ability to repay” rules as of last month, and some other things you may have to prepare for. Are you working with a broker or loan officer that does FHA loans? If not, talk with one who does.
Okay I have a total of five loans with Sallie Mae. Four federal and one private. The federal loans are now consolidated after I completed the 9 month rehab program. Its been consolidated with Fedloan and Nelnet. The private loan is with Integrity Solutions Service and I currently just settled with them. I have been on for job for a while and I borrowed the money from my 401K. I just finish paying them off last week. What step do I need to take to get Sallie Mae to take this off my credit as negative standing. I check my Fico score when trying to buy a house and it stated the below.
Experian-577
Transunion-545
Equifax-595
Currently I am working with Lexington Law Firm to clean up my credit. Basically the high charge off is Sallie Mae with the private loan. I don’t understand if I only have one private loan then why is it showing on my credit as below…
Transunion
SALLIE MAE xxxx1200 Charge Off
SALLIE MAE xxxx2200 Charge Off
SALLIE MAE xxxx3200 Charge Off
SALLIE MAE xxxx1200 120+day Late Payment
SALLIE MAE xxxx2200 120+day Late Payment
SALLIE MAE xxxx3200 120+day Late Payment
SALLIE MAE xxxx4200 120+day Late Payment
Equifax
DEPT OF ED/SALLIE MAE xxxx0090 120+day Late Payment
SALLIE MAE xxxx0080 Charge Off
DEPT OF ED/SALLIE MAE xxxx0090 120+day Late Payment
SALLIE MAE xxxx0071 120+day Late Payment
Experian
SALLIE MAE xxxx2007 120+day Late Payment
SALLIE MAE xxxx2009 120+day Late Payment
SALLIE MAE xxxx2008 120+day Late Payment
Sorry for so long story, but I am 30, single and have two boys and trying to provide a better future for them. My goal is to get my credit score to 650-700.
*********Please help************************
Sallie Mae reported me 3 different times when I was trying to buy a house. My lender called, I called to beg them to only report me once. after bugging them many times I only have 1 report on my credit report from them.
It sounds like the private loan was not updated to show that it was settled for less than the full balance/paid for less than the full balance. That will look much better than the charge-off. many times, Sallie Mae/Navient private loans are bundled when sent to a collection agency so the settlement may have been on all of your loans. Or, there’s the off chance that there were other private loans that were not being collected on by Integrity. But I think the first scenario is much more likely – you paid one settlement that included all of the loans.
Navient should update your credit report within 30-60 days after the settlement. You can also dispute the credit listing yourself with a copy of the payment method you made and the settlement letter. You can also get a settlement confirmation from the collection agency in many cases and you could use that to dispute the accounts as well, or even show it to your mortgage lender as proof that the charge-offs were paid.
I agree with Lynne C. SallieMAe will not accept a settlement without going into default. I too offered them $20k to resolve my outstanding debt of $30k. They flat out refused. It’s better to pay down the loan aggressively i.e. take the $20k your mom is offering and pay down the loan. Keep to your regular payment schedule. I am doing the same thing. Paying down $24k.
Is there any way that Sallie Mae will accept a settlement without going into default? I have a $19,000 unsubsidized and $20,000 subsidized student loan with Sallie Mae from 2009, interest rate of 6.8%. I graduated in 2010 and since then the loans have been in deferment, first I was unemployed then I was self employed and bringing in approximately $17,000 a year for the last two years. At some point I’m sure I will not be able to get any more deferments and I don’t see my income increasing any time soon. My mother has offered to help with the loan if I’m able to get a settlement, she could help with about $20,000 but would not be able to go much higher than that. I would love to just have this debt go away. I’m so concerned that if I default that it will just get larger and larger and there will be no hope of ever paying it off. Do you think there is any chance of settlement?
In general no, unfortunately. They just don’t have the incentive to accept a major reduced sum settlement when the account is current, monthly payments are being made to 100% of the principal + interest (or if it’s on forbearance and accruing tons more interest).
However, I do know of a borrower who was able to get a 90% offer when the account was current after repeatedly badgering them and then filing a complaint. 10% off is pretty good for a current account, but not the kind of settlement reduction most people are looking for.
Hello
I currently have two private loans with Sallie Mae totaling 15000 . I started paying them in 2009 have had make minimum payments for most this time. I original starting balance was 14000. I’ve been paying 360 a month the past two years and my principal hasn’t gone done a penny still! Im wondering at this point if i let it default and they send me to collections would they take a settlement less than i owe?
Adrienne – What interest rates are you paying on your loans? Have you consolidated your loans in the past? Can you budget to pay more than the required minimum on your loans each month?
Adrienne: The reason your prinicipal hasn’t gone down is because all your payments are being applied to collateralized interest. I am presuming that you had forbearances on your loans. Defaulting on a student loan will ruin your credit. SallieMAe will probably settle if you default and your loans go into collections but is it worth ruining your credit rating? I’m current on my loan and they will not accept less than my outstanding balance. They would rather have me default.
Just a note of caution here – defaulting to settle can be a viable strategy for private student loans, but for federal loans it’s rarely a good idea. The reason being is because federal loans add a huge collections fee at the time of default that outweighs any of the limited settlement savings you would get.
Federal loans rarely settle for less than 80-90% of the balance unless they have been in default for years and years. If it’s a private student loan, that can work, but don’t expect them to hand you a settlement.. they will be very aggressive with their collection calls and letters for -8 months before accepting a settlement. It takes a sound settlement strategy and a lot of patience to achieve a lasting private loan settlement with Sallie Mae/Navient.
Is there anyway to get SallieMae to settle a loan debt for less than the amount owed? I spoke with a supervisor last night and he was very adamant that SallieMae does not renegotiate student loans. SallieMae makes settlements out of court on defaulted loans. So in essence they would rather have me default, file suit and then settle out of court.
Mohamud – It sounds like your payments with Sallie Mae are current. Is that correct? If you are current, with virtually any creditor, they are not going to respond well to any attempt to settle or pay less. You have not shown an inability to pay, until you do not pay.
Are the loans government backed, or private loans? My feedback will differ based on the answer. Also, what are some of the details of your situation? Why are the loan payments no longer affordable? Do you have at least an source of steady income?
I have a government backed loan dating from 1992. Original amount was $38,500 but due to fortuitious circumstances i.e. inability to land a well paying job, I exhausted all forbearances resulting in another $35-$38k of capitalized interest. I have paid off the capitalized interest and am now paying prinicipal and interest. I’m 56 and I lost my job 3 years ago. If I lose my job, I’m not getting as high paying a job as I have now. Bottomline…I owe another $30k+. I’m qualified for a HELOC at 2.5% interest as opposed to 9% with SallieMae. I’m looking to have SallieMae take $20k in full settlement of the outstanding debt and forgiving the $10k. They make these offers to defaulted loanees for out of court settlements. I’ve paid $115k over the life of this loan i.e. more than 3x what I borrowed. I want this albratross off my neck.
Mohamud – I do see settlements with Sallie Mae. One for 50% of the balance last week on a private loan Sallie Mae serviced. I do not see settlements with Sallie Mae in the way that you described with federally backed loans. If you were to try to settle, you would have to have stopped payments for some time (creditors typically will not negotiate reduced pay off while current). You end up with collection costs/fees again.
Have you looked into other options to reduce your loan payments, like an IBR?
So for SallieMae to accept 50% of the balance, I would have stop making payments, damage my credit rating and have SallieMae send a collector. What a great system we have. Punish the current borrowers and reward the defaulted borrowers. Something has to change. What is in IBR? I am just going to pay SallieMae the full amount of the HELOC and pay off the remainder. I should be free from this albatross around my neck by September. What a wonderful country we live in. Pay loans for your life if seek an education. Thanks for your help and comments.
Mohamud – Student loans, and the higher education system in general, could use a dramatic make over – no doubt!
IBR stands for Income Based Repayment. Loans not in default may qualify to get payments reduced to a more affordable and consistent amount. You can learn more about IBR options here: https://studentaid.ed.gov/repay-loans/understand/plans/income-based.
Knocking the loans down with Sallie Mae by aggressively paying down the balance, and having the lower interest rate, is a good plan with loans that are not sinking you (which I agree is a matter of perspective).
Cleveland. I have wondered why it couldn’t be bankrupt since the school closed and the federal courts found in favor of students I would think that the loan can no longer be considered force educational purposes.
I sent you contact info to two attorneys with the experience you would want.
If you do decide on chapter 7 bankruptcy discharge, be sure to screen any attorney you hire for experience in discharging student loans. So far, my experience is most don’t have it, and some even tell you it cannot be done. But this is the type of situation where student loans can be discharged in bankruptcy.
I contacted the lady in Cleveland who said I should file a complaint with cfpb.com. Well just before that Sallie mae charged off my account and sent me to this collection agency which were not nice. I ended up thinking I worked a settlement out with them then sallie mae cut off all communications because I filed the complaint. They won’t do anything now and they lied to the cfpb.com which accepted their lie and closed my case. I contacted Ellen (I should publicize her name here to avoid her bad information from spreading) and she blew me off told me it’s not her problem. So it was great advice I got from her and you for connecting me with her. I was almost to a point to make a deal and get the bs behind me and now I have to wait to loose my arbitration because sallie mae hired the arbitrators. Another government screwing and Lawyers who could care less because it’s not happening go them. It ridiculous!
brian – The CFPB is currently investigating Sallie Mae for violations of consumer protection laws. They care about the issue a great deal. The attorney referring you to file a complaint with the CFPB may not be the issue, but you said Sallie Mae lied to them in response. Can you show where they lied? Did you follow that up?
The cfpb.gov acts like they are there to help you until they take your complaint then they talk to you like your an ahole, the secretaries that answer the calls are rude and have no customer service skills. When a government agency like sallie mae
( yes our government is still in bed with them) says how it is going to be the cfpb.gov bows to them. They told them their consumer advocate was available to me till he found out about my claim then no one was available to me. They cannot even give me account details. They said we have an active legal matters which the wording was changed to litigation when I said I have no active court matter with them. I have arbitration set with them, they hired the arbitrators and everyone is losing. First they were willing to make a deal if I have $20k..now it’s $21k..if I had that kind of money, I wouldn’t be in the messed up situation with them. And why does everything always change with them? Plus collections was offering a deal for $14-15k. I was scammed like thousands also. The way the government protects these thieves is ridiculous. If they do not want to settle for what I have they will get nothing. I will adjust my exemptions so I have no tax return and if they sue for wage garnishment I will quit my job. They will not get a cent from me. Because the loan repaid will be over $150k based on their terms and I got nothing for it but a headache and my good credit destroyed by these people. Also I was not one of the people going to this school cause my mommy made me I went, no cosigner and worked my butt off for never being able to get a real job doing anything in that field. I am going to give them a pie e of my mind at arbitration
I have a sallie mae loan that is in arbitration over computertrainging.com going out of business. They have never once offered to help and want all their money now. So I have not been paying and now my loan is reported unpaid balance charged off so I get a call from collection credit service and they want to make a deal of $7000 down and reduce loan to 50% and I pay $600 a month for 2 years and they are pressuring my for bank account numbers. Seems like sallie mae sold it to them and after awhile they will sell it and after 7 years seems like this may drop off and not owe them a dime…..what do you think?
brian – What is the date of the payment you last made to Sallie Mae on the loan?
July 2012 is the last reported payment on their website.
You can still be sued for collection. Each state has a statute of limitations for how long you can legitimately be sued in court for this type of loan. The shortest amount is 3 years, and the average 4. What state are you in? What is the gist with the arbitration you referenced in your earlier comment?
The negative will drop from your credit within 7.5 years from the date you first missed a payment.
Ohio. See I hear different things. One guy told me statue of limitations is 15 years. So I do not know. The arbitration is sallie mae way of wiggling out of their predatory lending that these shady schools and them get into cohoots with. Their was a class action lawsuit and a Federal judge dismissed sallie mae probably because the judge has an interest in sallie mae and he found in favor of the students and ordered the school refund our tuition. They are so called bankrupt because they hid the money they stole so the students get nothing and sallie mae was sent discharge papers which they ignored then the arbitration company they listed in the loan paperwork were contacted and sallie mae agreed to arbitration but not as a whole group they have it so everybody in the class action suit is arbitrated one at a time and they pay off the arbitrator and screw everybody for a bogus scam school that they back again. Weird how this keeps happening all over the country and the only loan company involved is sallie mae. It’s predatory lending but no one seems to be able to do anything about it because the pos government keeps sallie mae safe while they steal from people who want to improve their lives
And from what I heard nobody is getting over sallie mae in arbitration
SOL in Ohio on written contracts is 8 years. I hear you on the arbitration clauses and how that impacts the ability to to act as a class. It is a huge problem, and is not getting any better.
What is the name of the company trying to collect? Have you called and confirmed with Sallie Mae that they sold the account?
Is that 8 years from date of loan origination or last payment? Co any is ccs credit collection service. Sallie mae has said they sent it to that company. Do you know the process this will take if I don’t settle with them?
If the statue applies it would generally be 8 years from when you defaulted. Ideally you would want to get any SOL question related to this answered by an experienced debt collection defense attorney in Ohio. Email me the city you live in and I can send you contact info to one.
Sallie Mae “sending” the file to Credit Collection Services would imply they did not purchase the debt from Sallie. CCS is not a “usual suspect” in the debt buying space either.
In the normal course of collections you could be sued. Given the arbitration proceedings, and the college closure, your loan may be handled a little differently. Your loan also may be one of the limited type that could qualify for discharge in bankruptcy.