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.
I’m in a situation where I have one private student loan (currently approx. 31k – original loan was for 20k) in default which is now with Navient (formerly serviced by Sallie Mae) and I am considering letting it go. I am about 6 months past due. I used to have 5 other private loans with Sallie Mae that were completely paid in full (in 2008) before the switch to Navient as the loan servicer. I also have federal loans (approx. 50k) which I have paid little to none on but I have been using the IBR plan. I solely provide for my family of 3, my husband has medical issues and has not been able to work for over 5 yrs and we have one child. My gross income is approx 55k and after taxes, health insurance and 401k – I am left with closer to 40k. I cannot afford even a $100 payment on my loans. I have tried to make a $94 interest only payment for several years now. My car insurance has increase drastically due to an accident and I no longer have any financial “fluff” to get me by. I am now 180 days past due and highly considering riding the “let’s just see what will happen train” in order to keep my utilities, rent etc all paid. After I pay all my primary expenses I have about $150 left every 2 weeks for gas, unknowns etc (hence why I cannot even afford the interest only payment). I graduated in 2007 and my family helped me when they could on the other private loans that were paid in full. They will not help any more than they have and I do not expect them to.
What are my best options?
1. I would like to try to file for BK (coming up with the money to file will be difficult but if it sounds worth it I may try). I don’t have much else debt wise to try to get rid of besides this private loan, my credit is already tarnished bad and I realize how hard it is to even hope that partial forgiveness will be granted. As far as the brunner test, I think a “good faith effort” to pay has certainly been made to Navient considering the approx $100k that was paid to them in 2008. But other than that, I can’t argue much. My salary will likely increase slowly over time. Also, we only have one vehicle that I am still paying on for another year and it is in poor shape.
2. Let it go completely and wait….I wonder if Navient would feel it worth while to come after me and sue me? I was worried about wage garnishment and tax refund garnishment, but I’m fairly certain now that cannot happen with a private loan unless they sue me and win. Also, I do not own any property. If they happen to sue me within 4 yrs (I live in California) how long would it be approximately until they could garnish my wages? How long is this process normally? In the meantime I cannot buy a house, another car, have more kids… my life is literally on hold. AND JUST TODAY I GOT AN EMAIL OFFER to settle for 70% of the debt owed, great – but still something I cannot afford currently.
Hi Michelle, this is a very common situation for many people with inflexible private loans. It sounds like settlement is not really a possibility even if it were closer to 40% and spread out over time; nor would a payment plan be affordable, so that really does narrow the options.
Whether or not Navient decides to sue, it depends.. I have seen them take borrowers to court over balances in the mid $30k range before. If they send the account to a collection attorney in your state, it’s probably best to try to work out some type of repayment plan or settlement if you can to avoid a lawsuit; but if that doesn’t happen, the wait and see approach may be a good idea.
Wage garnishment or bank account levy can only happen if they win a lawsuit against you and are able to execute the judgment, which can take several months or longer after they are awarded a judgment. It’s really better to try to work out some type of payment plan or settlement prior to that happening, if you notice the accounts are sent to a collection attorney that is licensed in your state. Private creditors cannot garnish your tax return like the federal government can.
As far as filing BK, it’s an uphill battle, but Steve Rhode has a great article about discharging private loans in BK here: https://getoutofdebt.org/53288/these-private-student-loans-can-be-easily-discharged-in-bankruptcy
And another good article on the topic here: https://getoutofdebt.org/48336/how-to-really-discharge-your-student-loans-in-bankruptcy
Hi Andrew,
It’s me again. I’d love to talk to you further about my situation. Is there a direct line, extension or email of which I could have a few moments of your time.
Thanks
Hi Michelle, nice to hear from you – for a private student loan evaluation please dial the hotline and select ‘Option 4’ to be connected with me.
Hello,
I have a student loan with Navient. They claimed that I last paid in 2009, and they just contacted me today 04/14/2016, about a defaulted loan.
The loan amount was $2300. But with interests today it’s $4800. I have a lot of debt, I’m in school, and the last payment I made was 2009. How should I approach asking for a settlement? FYI I consolidated my public loans in 2014.
Hi Josh, do you know for sure that these are private student loans? These may be past the statutes of limitation in your state, although a lot of different actions can reactivate “SOL” so you’d want to check with a consumer defense attorney in your state to be sure.
After 2009, were you in in-school deferment with them or just did not make payments? If you wanted to settle, you would probably be able to get a very low settlement as I advised the poster above you; however this may not be necessary if the account is not showing on your credit report and is in fact past the “SOL” in your state.
hello,
I had a sallie mae loan that i took out in 2003 that has been since transferred to navient. i am also currently paying on my federal loans which are also listed under navient. my question is, why do i still owe money on a loan from 2003? on their website it lists that i have missed 19 payments. i stopped paying on this loan in 2005. is there a reason why this loan has not gone away? do i still owe on this loan?
i’d appreciate any insight on this.
Are you sure this loan isn’t a federal loan too? Normally, after 11 years, a private loan that didn’t have any payments made would have fallen off of your credit report. However, they may still be trying to collect on it even though it could be past SOL and not on your credit report.
Some more information would be helpful. Is it the Navient website saying there have been 19 missed payments? Are you getting calls from any debt collectors, or collection letters about this account? Feel free to respond below in comments and we can try to get this figured out.
Hello,
Thank you so much for responding, and I apologize for not replying to you right away.
I am positive that this is a private loan, and this loan does not show on my credit report.
It is the Navient website saying that I owe, and that I missed 19 payments. The Federal Loans that I have under Navient are listed as federal loans, and I am currently paying on these.
I am not getting collections calls, although they did try to contact me at my work. They are not calling there anymore. I am not getting collection letters. I am happy to give any extra info that may help.
Thank you again,
Nikki
Hi Nikki, you’re very welcome and it’s whenever you are able to reply, no worries. If you haven’t made payments since 2005 then you would have missed a lot more than 19 payments, so I’m not sure why it’s just saying 19 payments.. but your loan may be past the statute of limitations for unsecured debt.
Many things can reactivate statute of limitations such as partial payments or even just “acknowledging the debt” in some states, so you would want to check with a consumer defense attorney in your state to find out for sure.
Is this showing up on your credit report? I’m sure a very low settlement (less than 25%) would be available at this stage, but if they aren’t showing up on the credit report then there may be no reason to settle them since they may very well be past the statutes of limitation in your state.
Hello,
Thank you again for your response. I was thinking that I missed way more than 19 payments, too, as the debt is so old. And to answer your question, this charge does not show on my credit report.
However, Navient has combined the private loan along with my federal loan that I am paying on, and saying that I owe both. My private loan was transferred to Navient in 2o14. My last payment on this loan was in 2oo7.
They are not attempting to collect on this private loan, but I believe fees are accruing, but I dont understand how this can be due to the age of the loan.
Do you have any other thoughts?
Thank you much,
Nik
Hi Nik, Navient should not be able to merge the private loan into the federal loan balance, but it is possible that they are collecting on both and sending you a statement for the private and the federal loan. They are not supposed to merge the two loans together, so most likely they are just trying to get payment on the separate private and federal loans at the same time.
If the private loan isn’t on your credit report, then it really isn’t affecting you that much it sounds like. Private lenders can still try to collect after loans have fallen off a credit report or gone past S.O.L, but this is typically just sending letters or making collection calls. Interest will still accrue and the loan still exists, it just doesn’t have any impact on your credit if it’s not reporting.
Hello again,
Thank you for your comment. The two loans are not merged, but it does show that i am accruing interest on the private loan. However, they are not attempting to collect on it. The only loan I am currently paying on is my federal loan. The federal loan does show on my credit report.
The private loan is not affecting me, it just surprises me that after all this time, even after the sol has passed, the loan still shows.
Thank you for all your help and insight,
Nik
Hi Nik, even though a private loan has fallen off your credit report, they can still try to collect on it. SOL and credit reporting timelines don’t erase a private loan once they’ve passed, but as you mentioned, it does become much more difficult for them to collect and doesn’t affect borrowers via credit reporting. But, they will definitely still try to collect on it by sending letters or kicking out to a collection agency that specializes in collecting on old debt.
Hi, i wanted to jump in on this conversation because it sounds just like mine, however mine are showing on my credit. I live in az and our statue of limitations is 5 years. Mine are also from 2005. How can they still be able to report on this?
Thank you
Hi Liz, credit reporting and statutes of limitation are two separate and unrelated timelines. Depending on when your private loan charged off, it is supposed to fall off of your credit 7.5 years after that has happened.
This is not the same as statute of limitations, which is the timeframe that a creditor can try to take you to court without the borrower raising SOL has a defense. Sometimes even when credit notations are outdated, they can stay on your credit report unless you dispute them.
A review of your credit report and some more info would probably be necessary to get to the bottom of it. But if you are past SOL already then you’re probably only a few years away from it falling off of your credit.
Hi There,
I am currently in a 5 year, chapter 13 bankruptcy, all student loans. It was supposed to end 03/16, but it takes a while to close apparently. I am at the end of attempting to get my security clearance adjudicated for a prospective job, but have to provide them with my “plan” to pay off my student loans {PRIVATE: principal $3oK, owe approximately $71k (Navient) FEDERAL: $33k owe approximately $40k (FedLoan Servicing)}
My lawyer’s plan is to keep me in a perpetual bankruptcy until the law about discharging student loans is amended. I DO NOT want to do this and I don’t think my security clearance would be adjudicated if this was my grand plan. However, I have no idea how I would pay off $110k in student loans.
I have about $10k in my 401k. I have been considering a settlement with Navient and an income-based payment plan with the Federal loans. Everyone I have discussed this with, including my T.Rowe Price guy for my 401k says it is a terrible idea, but no one has an alternative plan. I know a 401k is critical, but I see no way out of this debtor’s prison I am in. Any advice would be so welcome and appreciated. Thanks!!
Hello, since no one is sure if or when the bankruptcy laws regarding student loans will be amended, I think that a more proactive strategy that utilizes existing relief options would be a better idea.
Instead of using your 401k, maybe you could use an unsecured line of credit to pay off a settlement with Navient. However, Navient would not consider any settlement on the private loans unless the accounts were significantly past due, which would cause damage to your credit. It’s a trade-off, but for some people the reduction in the balance is worth the credit damage. This is a decision that only you can make.
I do agree with your financial advisor to not tap into the $10k in your 401k unless absolutely necessary. IBR or RePAYE for the federal loans can be a great solution, but it does have some drawbacks, and not all student loan specialists are fans of these programs. But for many people, they can offer a more reasonable way to repay their federal loans.
Private loans can be more difficult because there are very few payment options, so some people decide to strategically default to settle as you mentioned. However, I’m not sure if a strategic default and settlement is the type of repayment strategy that your prospective employer is looking for. Perhaps they would be open to that if you explained to them that there are no other options other than making payments which may not reduce your balance and may result in your private loan growing even more due to accrued interest.
I have a private loan with sallie mae, now transferred to navient that’s 85k, it started at like 25k something, it went into forbearance several times while I was in school, and I had no idea what accrued interest was back then,but I unfortunately know now. Anyway, fast track to the past couple of years, I have been constantly fighting with them to get my 900 dollar payment a month reduced, they offered me a program where I’m paying 300 something a month, however I have ran into serious financial difficulties, and they are essentially saying if I cannot pay 307 this month for a “rollover payment” then my account will get charged off, my main question is if my account gets charged off , does this mean it goes to further collection, will they sue me? Take me to court? Garnish my wages? Couple of facts- it’s a private student loan, 180 days past due, paid in December through end of February 365 a month. Can’t make a payment until april, but they won’t accept that and are threatening to charge off.
Hello, this is a common issue with Navient private loans, due to their inflexible payment terms which often force borrowers into default (charge-off). By the way, Navient is just a spin off of Sallie Mae and has many of the problems Sallie Mae had.
It’s possible when an account is charged off, and no repayment or settlement attempts are made, that Navient may send the account to a collection attorney in your state. If nothing is done, they may try to pursue a judgment.
However at this stage, it is very often still possible to get on to a payment plan or even a reduced sum settlement. The larger the balance is, the higher the stakes are for a successful settlement – so it can make sense to hire a certified financial professional with experience settling charged off Navient accounts. The largest account I have settled to date had a balance of $183,000 (made up of multiple individual loans).
Keep in mind, that when they try to scare you before charge off and say that no options will be available, your account will be “terminated” (which isn’t even an actual thing), and similar threats – they are just trying to prevent the charge off.
Settlements can even be split up over 12 months or longer, with a decent sized down payment. All of my Navient settlements have been below 50% so far, but as Michael has said, a good settlement is one you can afford. And as I like to say, executing the settlement properly is just as important as negotiating a good deal.
If you’d like to chat with me about this further, feel free to call the Debt Relief Hotline and press “Option 4”.
;
Hi,
Please help. My private Sallie Mae balance is over 175,000. I am two months past due. I have paid nothing to Navient as the minimum payments are too high. My federal loans are current as I am on IBR and have 0 due.
I would like to settle however I do not have a large sum of cash up front.
Hi Cileena, we have talked about this before but just noticed your comment.. for anyone else reading, it can be possible to settle Navient private loans after they default at 6 months. Usually I can get Navient down to about 40-45% of the balance over 18-24 months of payments (with a large down payment), although this isn’t easy and they sometimes may take aggressive action on larger accounts right after it defaults – like sending it to a collection attorney in your state.
Hi Michael,
My father from CA was the sole borrower on 3 Parent Plus loans taken out in CT for my niece though her name does not appear on the loan docs. He has since passed away and the loans are in default. Are the loans eligible for discharge? If so how do we go about applying for this action? If not who is responsible? Nobody has enough money to service these loans as they stand.
Is there probate or an estate pending resolution?
Hi Lynda,
I found the following on the government student loan site:
“What happens to my parent’s PLUS loan if my parent dies or if I die?
Your parent’s PLUS loan will be discharged if your parent dies or if you (the student on whose behalf your parent obtained the loan) die.
top
What proof of death is needed to discharge a loan?
The loan will be discharged if a family member or other representative provides the loan serviceracceptable documentation of the borrower’s or parent’s death. Acceptable documentation includes an original death certificate, a certified copy of the death certificate, or an accurate and complete photocopy of one of those documents. For more information about documentation requirements, contact your loan servicer.”
Best bet is to send a certified copy of the death certificate via Priority mail, with return receipt requested (make them sign for it). Include a short letter stating your request as well.
You may have to be persistent since discharging a loan is not what servicers really want to do. But they are required to do that under Dept. of Ed. guidelines, and filing a complaint against them may be a viable solution if they don’t grant the discharge after you ask.
Actually, private loan refinance lenders such as SoFi don’t charge any origination fees.
Hello Michael ,
I was wondering about my Private student loan. I received a letter from a collection agency on March 2. 2016 trying to collect on the full amount of my Navient loan. I was under the impression recently that I was in good standing with my Navient loan since I have been making payments to them for the at least 2 years and they have been taking my payment. My account on their website appears that my account is up to date and in repayment plan. I have even been receiving statements showing my account is in repayment. I called Navient customer service agents who said my account was in good standing but when I brought up the collection letter they referred me to their collection department who only then says my account was charged off in 2014 and they are no longer handling my account. My question is if my account was charged off why would I still have monthly statements from Navient on file requesting the monthly payments (the most recent was February 2016)?Most importantly, If the loans were charged off should they have been collecting payment from me and charging me monthly interest? Is it normal that my account online appear that it is up to date and active and allowing me to make payments to them if I was already sent to collections and the loans were charged off? I’m so confused about all of this. Any input would help. Thank you.
Hi Carol, I have quite a bit of experience dealing with Navient private student loans so I think I can chime in here.
Your situation certainly is not the norm. Sometimes, Navient will take payments on a charged-off account with their Internal Recovery department, but if that were the type of payment plan you were on then it would not have been sent to a collector, it would have stayed with Navient Internal Recovery. Plus, the fact that your account is showing as up to date on their website leads me to believe that this could be a mistake on the part of Navient.
However, it may also be a blessing in disguise, because it’s possible to negotiate settlements of less than 50% on Navient accounts when they are charged off (which I do on a regular basis).
First, I think you should reach out to Navient’s Customer Advocate Department and speak with someone there. They are generally more helpful than the reps at Navient’s general call centers (which are often offshore) and they can be more helpful than third party collection agents as well. To contact Navient’s Customer Advocate Department you can email them at: advocate@navient.com. They will email or call you back within 24-48 hours. These agents are based in the US and are usually, but not always, helpful in resolving borrower problems.
If they are not helpful, you may want to consider filing a CFPB complaint against Navient at CFPB.gov. That will really light a fire under them and will most likely get someone in their upper level customer service management to respond. I’ve been able to resolve some serious issues with Navient private loans by having clients file these types of complaints. But, I think it does make sense to try their Customer Advocate Department first.
If you can come up with about half the balance over 1-2 years, you may want to consider settling with them. Navient will often take structured settlements for half the balance or less on charged off accounts – and they can go out 1-2 years on a structured term settlement to do so. If you go this route you’ll want to make sure to get the settlement in writing and to keep copies of everything – including the payment method used to make the settlement. If it was charged off two years ago I think a settlement significantly lower than 50% may be possible based on what I know about their collection cycle.
Thank you so much for this information. The collection agency/firm is in Ohio and I live in California. What will the customer advocate do? Will they just shine some light on how my account was mishandled? In the end it looks like I still need to come up with an arrangement with the collection agency they assigned since it was charged off, correct? This has been a headache since last Friday since the first phone call I received from the collection agency/firm.
Is it Weltman Weinberg and Reis? That’s one of the big collection agencies in Ohio. My rule of thumb for these types of situations is that when dealing with lenders, especially Navient, it’s easier to work with existing options going forward than to try to prove wrongdoing going backwards. I am not sure if WW+R has an office in California, it may say whether or not they are licensed in California on the collection letter.
And yes that is about what the Customer Advocate Department will do. If you’re in a position to settle, Michael has a lot of great resources on this site on how to approach that. You can also hire a professional negotiator to assist you with the settlement process. I have settled many Navient accounts in this type of situation, and can often get a lower settlement for borrowers than what they are able to negotiate themselves.
Sometimes collection agents take a credit counselor or negotiator a little more seriously since they know that we have more experience dealing with them than the average borrower does. And if it’s WW+R I have a good contact there who I have settled with before, which can also help. I’m assuming that’s who has your account since they are one of the largest collection firms in Ohio (which is also where I’m located).
I asked Andrew to respond to you Carol. He knows his stuff. I am interviewing him next week and will likely embed the video in the original article above, so look for that.
Hi there! I have a few student loans currently being serviced by Navient. 2 are federal, which are in good standing and 2 are private. Of the 2 private loans one of them is in default and has been pushed off to NES (National Enterprise Systems). Dealing with this collection agency has been a nightmare. They are terrible people. I have been paying this loan at the rate of $115.00 per month with practically 0 interest for about 2 years. The balance is currently about $10,950. I called to make a settlement offer and received an offer of 50% of the balance. Im wondering if you think this is a good settlement and what are some things i should look out for before paying. I plan on paying ASAP. Thank you!
When I am asked “what is a good settlement offer” I often respond with “one you can afford to pay”. You are able to fund this, so from that perspective it is good, and after all… who doesn’t like a half off sale?
You may be wondering if you are leaving money on the table, and the answer to that is much more personalized. It can depend on how you are viewed by debt collectors. Real time access to your credit reports is sometimes all a collector needs to assess how much of a collection target you are.
I am doing a video interview with a former debt collector for our YouTube channel later this month. The topic is how debt collectors view your credit reports, and also how that is done with an algorithm in some cases. I will be able to point to that in response to comments like this, but for now, call me and lets talk about how collectable you look, and whether you have a realistic shot at settling for less than half. You can reach me at 800-939-8357, press option 2.
If you are thinking to just grab the deal, be sure to get the agreement in writing before you pay. That article highlights what to look for in the agreement from National Enterprise.
Thanks for the reply. I guess I should have made my question a little bit clearer. What I really meant is if I pay more than the required payment for the federal loan, can they take that extra money and apply it to the defaulted loans instead of applying it to the principal of the federal loan?
Beyond your primary question Zen, Navient is settling private student loans favorably right now. Keep that in mind as you navigate resolving your loans.
I have private and federal loans with SM/Navient. I defaulted on the private loans several years ago and they are in collection but my federal loans are current. I like to pay off my federal loan ASAP. Can they take the money and apply it to the defaulted loans without my permission?
Hi Zen, I would agree with Michael that settlement may be your best route out of default. Navient and their third party collectors will even structure settlements out to 1-2 years, or longer in some cases. This can make settlement more affordable than having to pay it all in one lump sum. Just remember to get the settlement offer in writing and keep copies of everything, including the payment method used to make the settlement.
Since Navient/Sallie Mae is so inflexible with payment options, settlement can be the best way to knock out a private loan with them. If you haven’t paid in several years then a settlement significantly less than 50% may be available.
My wife has approximately 10k dollars in loans from Sallie Mae(now Navient) from a trade school that defaulted and is now closed, are we still liable to pay off the entirety of the loan or is there grounds for reimbursement of the past 5 years of payments we have made on these loans that are accomplishing absolutely nothing due to the trade school losing its credibility, thanks in advance.
There is a good amount of attention being paid to some of the private colleges and trade schools for a host of questionable practices. Some of that has even culminated in loan cancellation. If your wife attended a school that has been shut down, she may have options to pursue for cancelling the debt now, or in the future. But I am skeptical of being reimbursed.
What is the name of the defunct school?
What is some of the back story regarding her loans and whether she is now employed in that trade, or continuing her education with any credits transferred etc?
I currently have loans in Forbearance with Navient(Sallie Mae). I am a stay at home mom of 4 and CANNOT afford to repay these loans. When i called about options last year they told me I could pay like 400$ a month for the next 21 years….. UMMMMM no! I could barely pay 50$… Are their options for something like this. It greatly affects my credit. My Fiance works hard to provide for our family and going back to work is not an option with the 4 kids not being in school, Just not affordable. Somethings got to give.
Are your loans private or federal? What are the totals?
I graduated after five years with my BA in psychology. I owe SallieMae/Navient over $100,000 in private loans. I make the minimum payment for my loans that I didn’t have a consigner for –
$140. My consigner pays around $400 on the loans he cosigned on. I make about 23k a year. I feel like I will never scratch the surface of my loans so I’m tempted to not pay and see what happens, but I’ve always paid because I’m afraid of my credit being ruined. It’s just so overwhelming. Before my son was born I even thought about ending my life because of it. Is there any hope for people like me? I am 28yo right now. Another question is will money I owe on private loans be taken out of my social security of I can’t pay when I’m old?? I don’t want to be a. Harden to my son. Thank you for reading!
You can look to qualify for one of the income contingent plans on your federal loans if you are current with them. On the private loans, they have to sue you and get a judgment in order to obtain the extra ordinary collection rights.
Who are your private loans with,and what are the balances? If late paying, how late?
Are there any attorneys in Kansas that you know of who can help me with discharging my students loans in bankruptcy? I owed $106k before I decided to do the IBR plan last year. I have a letter dated 03/25/15 from Navient stating my application for IBR was approved beginning on 03/28/15 and ending on 02/28/16 and my monthly payment will be $0.00.
I received a billing statement from Navient dated 10/21/15 which I received today 11/8/15 requesting I pay $72..06. And, now I owe $109k due. The difference if sure to interest not being paid I assume on my student loans. Has something changed with the IBR that now I am required to pay a payment each month? I have not reached my end date 02/28/16 yet. I have not had a chance to renew IBR either. I am frustrated when I talk to a Navient customer service rep they do not seem to know what is going on with my account. Am I forced to pay the $72.06…what should I do? I ama single mother raising three teens working part-time employed at $8hr barely can make ends meet. I am looking for higher paying job but where I live it is a part time workforce. I have yet to utilize my masters degree and I feel my education was a waste of time and I got snookered into believing I would have a job and get decent pay when I graduated by the college I attended, It was all a lie, there are no jobs in my career field it is over saturated. I would have to move out of state east or west coast to find work which I cannot afford that right now. I appreciate any helpful suggestions. Thanks.
I do not directly know of any Kansas bankruptcy attorneys with adversarial proceeding experience, which is typically what must be brought in order to discharge student loans in your chapter 7. You can call around to different bankruptcy attorney offices and lead with this question “Is there an attorney in your office with experience discharging student loans in an adversarial proceeding”? If not, ask if they know an attorney with that experience in your federal district.
Finding an attorney with the experience you need is only the first obstacle. You then would have to come up with a way to pay them the extra amount that would cover the legal work for representing you in the adversarial proceeding.
I would start by calling any low income legal aid office in the general area and ask if there is anyone there with the experience needed.
I am not sure why Navient is asking you to pay monthly when your current income based plan has not ended. If you are unable to get Navient to explain what is happening with your file, and why there are changes, you are not alone. Problems have been identified with communication from many student loan servicers. You may want to file a complaint with the CFPB about this and see if that leads to the information you need being made available to you.
I live in Philadelphia and i haven’t paid my student loans since 2008. I have low paying jobs where its enough to get by. I’m a mother of 3 and my youngest is autistic. Is there a way that these can be forgiven? I need help.
You would typically need to bring federal loans out of default in order to get them enrolled in an income based payment plan that could then lead to loan forgiveness if you meet certain criteria.
There are instances where you can meet the hardship criteria to discharge student loans in bankruptcy. Getting your loans discharged through bankruptcy can involve extra costs. There are some clearer qualifications for student loans to be discharged in bankruptcy coming, and I believe more people will choose that route and be successful (many multiples of how many try and qualify now).
I would consult with a bankruptcy in PA with experience discharging student debts. If you need help locating one let me know.
You can settle private student loans for less than what is owed. That is not getting them forgiven, so you would need to raise some money. If your loans are private, how much do they total?
What can you tell me about the Commercial surety Bond. Is it true that when a loan defaults lender cash in on the Bond and still charge you for those loans after they collect this Insurance on them. I ask because I have a tremendous amount of debt with Sallie Mae and I have defaulted on their loans before only to catch back up after a few month later. if they collect twice on the same loan it is consider illegal right? I would also like to know how I should go about finding an affordable debt lawyer to help in my attempt to payoff or fight with my debt I have struggled with since before my graduation in 2011. I feel that Sallie Mae has taken advantage and I need to understand how my loans were allocated and what or if any loan took a premium for commercial surety Bond. Please email me with any suggestion. Thank you!
Can you tell me what you have read and where about how Sallie Mae or Navient has applied any form of insurance against their defaulted loans they service or own? It sounds like an angle taken up as part of some stretched legal or accounting theory.
It would be difficult to have visibility into how Navient follows GAAP without that coming out in some regulatory action or as part of discovery in a lawsuit.
I do not think they are being paid twice. If payments from a consumer (or other resource) were to come in after a specific tax, accounting, or insurance element were applied, I imagine that would create an offset of some prior credit or loss. An audit would determine whether there are irregularities.
Are your student loans with Navient private? How much do you owe on them?
Settling student loans with Navient is becoming more common place when the loans are private. You have other options you can pursue with government backed student loans being serviced by Navient.
What is the name of a large city in the state you live (I will email you any consumer law attorney I know of with experience you need)?
I got hooked as a cosigner on student loans for my daughter. I didn’t know I was a cosigner after the first one that I agreed to. Fraud. It will soon be 10 years since she took out the last loan–she’d paying on them as agreed to. We’re in Louisiana. Since it’s been 10 years, can I report the fraud and get my name off as cosigner without her going to jail for fraud? Maybe statute of limitations? My credit has been trashed due to the amount of debt I show to have.
Thanks
Has there been an application to remove you as cosigner from the student loans sent in?
Private student loan releases still occur. A recent study suggests that 90% of them are declined though.
We could see improvements in how student loan lenders address releasing cosigners in the not too distant future. If you are unable to get released today, that could change.
I defaulted on a Sallie Mae student loan back in 2005. It has since dropped off my credit report. I originally attend the California School of Culinary arts for about 6 months. I moved to Utah in 2008. I now have GC Services calling on behalf of Sallie Mae. Do you know if they are able to do anything at this point?
Hi Brandon, whether or not the lender can take legal action, if that’s what you mean, is determined by the statutes of limitation for your state. This is a tricky topic that you would need to discuss with an attorney, because in some states even acknowledging the debt in a conversation can restart the SOL. In other states, it takes a partial payment to do that.
GC Services themselves are not an attorney debt collection firm so all they can do is call you and send letters. If the account does happen to be past SOL, then you would be able to raise that as a defense if it was forwarded to a debt collection attorney who is licensed in your state. If this is a private loan, that is. If it’s a federal loan then there are no statutes of limitation. Sallie Mae/Navient works with both, so you may want to check your NSLDS report or studentloans.gov to make sure these are not showing up as federal loans.
Does anyone have any resource information on where one can find assistance, or direction to begin the process ones self, of negotiating an offer and compromise settlement for an outstanding school loan balance. Nearly 15 years after Law School graduation, tens of thousands of dollars in payments my balance has not seen any appreciable reduction. The real estate market collapse, down turns in business and the economy have made any hope of satisfying the nearly 100,000 dollars remaining unlikely in the extreme.
Any help would be greatly appreciated.
Hi Paul, I wanted to respond even though this is an older post. If your loans are federal, they won’t settle for much of a reduction when in default. If they are private, you may be able to settle them for less than 50% if they are defaulted. If you still have questions about this process, or how to tell if your loans are private or federal, feel free to reach out to us here or call the Debt Relief Hotline.