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 took out two Sallie Mae Tuition Answer loans in 2008 and I had a co-signer. A collection agency recently contacted my co-signer and provided the original loan application/promissory note. The original loan amount was around 17k, they now say the balance is over 40k. No payments have ever been made. The SOL is 10 years. I’m inclined to tell my co-signer to send a full dead and desist and just ignore them. My only pause is that they have a cover sheet one line statement from Navient saying borrower default with a date of 2012. Again, I know I never paid a red cent on the loan. How should I approach?
If this is a private student loan, it appears from the details you provided that the account is passed the SOL to sue, and to credit report. I am not sure I would do anything with a private student loan this old.
Is there any help against Navient for those who live in Michigan? My accounts were current up until this last month and I plan to try to make it back to current, but am curious if there is any help. I’m paying to 2 lenders and it’s a huge payment. I haven’t finished my degree as I took a year off. Curious what the best option would be to lower payments at this time. My other issue is payment based after I graduate as I feel my income will be really good and they will want a ton of money in a payment with the new income. I’ve been told by others not to do income based because of this issue. My loans are Federal if that helps. My current loan is about 56,000.
With federal loans you can pursue your normal forbearance and deferment options, and then there are the repay plans that include IBR.
If your income is strong, you may not need an IBR plan when the time comes. But if you cannot meet the required minimum, look into it.
I am wondering what my options are for allowing default on my student loans. They went into repayment in 2010 however have been in deferment and forbearance much of the time and now are in IBR but I have been unemployed so have not been paying them/the payment due is $0/monthly as I called and informed them of my unemployment late last year. They are supposed to kick back in, in 11/2019.
I am trying to figure out my options as I owe just shy of 80K from 5.5 years of schooling and there is no way for me to make the monthly payments they want on the income I would be making with acquired employment expected in the next 60 days as I am a single income household.
There are only your known payment options to handle federal student loans. You cannot settle federal student loans for less like you can private loans with Navient. And it is super hard to get student loans discharged in bankruptcy (though not impossible if you can show undue hardship).
Hi!
I have a question about credit reporting for Navient FFLP loans.
Open Date: August 2007
Repayment Start Date: January 2009
Close Date (paid in full via consolidation): Oct 2018
Last Payment made (by me): August 2012
I’ve made zero payments in the past 7 years but Navient reported my account as current for months where I was in forbearance. There are several periods where I wasn’t in forbearance and Navient reflects those as delinquencies. So my 7 year credit history is a combination of forbearance months reported as “current” and non-forbearance months reported as delinquencies. My argument is that regardless of the fact that Navient REPORTED my account as current some months, I haven’t made a payment in over 7 years. After the last payment I made in August 2012, I never came back current. I believe the purge date of this account should be based on the actual date I went delinquent and was never current again. Should the forbearance periods be included in the calculation to determine when this account should be aged from my report? Or should it be based on the last time I actually made a payment (if Navient or myself provides this evidence to the agencies)?
I would talk to an experienced FCRA (Fair Credit Reporting Act) attorney in your state about this.
A forbearance could be considered bringing the account current, and that may be why this can hang out on your credit longer.
Ok I will reach out to an attorney. I thought the same thing about forbearance bringing the account current but they continued to tack on “late fees” each month of the forbearance which seems to refute the argument that the account was brought current. I will get a legal opinion for sure thank you!
I have a navient loan taken out in 2007 for $10,000. My last payment was made in September of 2010. My cosigner filed bankruptcy in 2010 which was discharged in 2018 which made my Navient payments to become due and with interest made the new balance $30,000.
I decided to enter a strategic default which went into effect June 2018. Over the phone, Navient agreed to settle for $10,000 lump sum by June 30. I received the settlement offer in writing on June 25 stating that I had to pay $11,300 lump sum by the next day June 26.
I want to hire an attorney to ensure that the settlement is legit. How much of a settlement offer should I accept?
Thanks
Hi Christy
can you tell me how long you were past due before navient reached out for settlement? also, do they contact you directly for settlement or pass it off to some collection agency? i am thinking of strategic default too and just want to evaluate the options available and how long it takes, thank you so much
I haven’t made a payment since Dec 2010. According to my credit report, they closed the account Feb 2019 with a zero balance, but Navient has still been contacting me directly not a collection agency. I am thinking that my case is past the 7 year statue of limitations so that is why it isn’t showing as in collections on my credit report. I had my attorney reach out for the settlement offer in June 2019. Now I am no longer going to settle because I realized that I might have a better chance in court.
That is within a normal settlement range that I see with Navient. But if this is more than 7 years since you stopped paying, it is likely not on your credit reports anymore, and they would likely be passed the SOL to sue if this has not been paid since 2007.
What is your motivation for the settlement?
Thank you for your response! I have recently disputed this on my credit report. I tried to settle because I did not know much about statue of limitation.
Hello, what happens once it is past SOL? Does it mean we can get away without paying? I was under the impression that you could do this with credit loans, but not student loans. Thank you!
If your loan with Navient is a federal student loan, you are always going to be on the hook for it. Your tax refunds, and even social security can be taken later on.
If your loan with Navient is a private student loan, the SOL to legitimately sue, or to credit report, will expire, and you can ignore it after that if you choose.
Hi Michael
I am in the same boat as Alyssa, i have a navient loan which was $30,000 original and is currently $70,000, i am unable to make the monthly payments, how long will it take navient to try and reach a settlement with me after i stop making payments on it?
i know initially they will not tell you they settle but after it discharges to a collection agency, what kind of payment plans will be available? is there any one who has done this recently
Can i contact you for advice on this directly ?
thank you
You can click the get debt help tab at the top of any page on the site and build a user profile with your Navient debt. When your profile is built click the tab to schedule a call with an expert. That will bring my calendar up so you can lock in a day and time that works for me to call you.
thanks
saw most these comments were from years ago-just verifying how accurate this information is now. I have loans thru navient which is gaining 6000 in capitalized interest a year….which is ridiculous. I have declared bankruptcy twice and would love to get a settlement.
I turned the comments off due to spam. I just turned them back on, to see how it goes, a week ago.
You can still settle private student loans with Navient. How prepared are you to pay a lump sum? If not a lump, assume they took 50% over 6 to 12 months. Could you commit to that with confidence?
I can pay a lump sum but have asked repeatedly when I call in to just be advised they don’t settle and added another 6500 to my principal as of 6/13. Please help. I would like to get this done
I replied to your direct email with a link to my calendar.
Hopefully this is a quick and easy question to be answered. My current monthly payment is avg $555 – I was on some payment plan last year where I was paying $255. During a phone call, a representative told me of some other program that would benefit me more – so she took me off the current program and processed me for the new program. To my surprise a few moments later, she replied that actually my accounts were not applicable for the new program. Then she and the manager have refused to put me back on the lower payments program I WAS JUST ON until they receive information from my cosigner (this info was not needed before). I told them I can pay then $255 a month – but they are now harassing my cosigner to pay the other $300. Are they able to go after my cosigner even when I am paying them SOMETHING? My loans are not in default at the moment. – Appreciate any insights!
Hi Alyssa, we need a little more info here. Who’s the lender? It sounds like there was some foul play involved, but in general private lenders can pursue a cosigner for an unpaid monthly payment or unpaid balance. Did you have the original agreement for the lower payment plan in writing? Some of those plans are temporary, and it may have expired, but it’s hard to say without knowing more information about what happened and who is holding or servicing the loans.
Hi, Andrew. Navient is my loan provider. I will have to go back through my e-documents (if they are still available) to see if there was something more concrete listed. In this particular case, the agreement was not ready to expire, but I was given a “better option”. Plenty of other incidents have happened over the years – too much to discuss here.
My main concern was with my cosigner – I have made all payments myself, was only late on a payment when they did the switcheroo of plans on me. I plan to still make payments, but wish to have them lowered. They say they can not lower the payments until they receive income information from my cosigner. And, of course, if my cosigner is well off in income, then they will not lower the payments and expect the cosigner to help.
I was under the impression a cosigner would come in only when a loan is in default.
This sounds like one of those situations that can really only be unraveled by going into a full account history with Navient.
Without something in writing (even an email) it will be tough to get them to agree to something they said in the past. The basic Navient customer service reps can be very inept in describing payment terms etc.
I don’t negotiate private student loan payment terms as a service, because all of the plans that I’m aware of are just a short term solution that increase the overall amount of the debt over time, or otherwise do nothing to create a long term solution. This is why I focus on negotiating reduced sum settlements on private loans (this would only be available if the accounts were in default, which would cause a significant amount of credit damage to both you and the cosigner if you’re current now).
The only payment plan I’m aware of that Navient offers for current borrowers is the “Interest only” payment plan – and this is temporary. It sounds like you may have been on this plan and it expired.
Do you know what the name of the payment plan was that they described as a “better option”?
The other payment plans available on Navient private loans are the interest rate reduction plan which is typically only available for borrowers that are behind or in default. It’s also a temporary payment plan.
They can ask your cosigner to make payments if they aren’t receiving the full amount that they want, but can’t force them. However, they can put the account into delinquent status and even default it if they aren’t getting the full amount of the payments they are asking for.
What I would recommend is contacting the Navient Customer Advocate office and opening a case with them to get to the bottom of this. That office has much more professional representatives than the general Navient customer service reps.
That office’s phone number is: 888 – 545-4199.
If after working with them they still aren’t willing to lower your payments and you aren’t able to make the payments, then you may have to plan for a potential default. Private loan lenders are very inflexible, unfortunately. Let us know how it goes with the Customer Advocate department in the comments here, and we can try to advise you further if they aren’t able to work something out for you.
Hope this helps –
I have a Sallie mae loan which apparently is now navient. I’ve had it over 12 years and it hasn’t gone down in fact it’s gone up. I’ve recently missed payments. I only work part time with a disability. They are saying I have to pay in full I don’t have $10,000. I hadn’t missed payments in the time of the loan until now. Also I have a cosigner who is a senior citizen. They say they clarge me interest by day. How is that even legal? Please respond.
Hi Tanesha, sorry to hear about the issues you’re having. It may be possible to settle this for about 40-50% of the balance, but it requires artful negotiations once the account has defaulted.
I can’t provide legal advice, but in general, interest does accrue on accounts whether they are current or delinquent, and this is usually outlined in the original borrower documentation (Promissory Note) .
If you’re not able to afford settlement, you can try their “low interest rate payment plan” although this is more of a short term solution. Private loans are difficult to discharge in bankruptcy, but more and more attorneys are attempting these. You may want to consider consulting with an experienced student loan attorney to see if you’d have a shot at a bankruptcy discharge.
I am reading the discussion in the comment section about private student loans. What does offset SSI mean exactly?
Federal student loans that go unpaid long enough can result in a hit to your social security check without being sued. There are ways to avoid that by being proactive with some of the federal loan payment options. What are the details of the situation?
Hi,
I have been paying on Navient Consolidated Federal Plus loans for six years.
Navient has six loans listed for me, 3 Parent Plus and 3 consolidated unsubsidized loans.
The 3 Parent plus loans I had consolidated and are the 3rd of the 3 consolidated loans. However, Navient refuses to believe me and I have been paying on six loans to keep this from default but I know they are incorrect, they claim they received this info from Sallie Mae and it is correct. All these loans were made back in 2008 before the Sallie Mae –> Navient switch.
I have the loan papers from my son’s school and It is clear what has happened. How can I make Navient show me where I signed for what they are charging me for? I am being charged 8.5% on each of these loans and have been paying in excess of $600 on them for the past 5 yrs and owe more now than when I started due to the interest rates and the way they are allotting the payments. against the principle and interest. I feel helpless and am sick of doing the right thing and getting screwed for it.
Hello, I would consider opening up a complaint with Navient’s Customer Advocate office. However, the interest rates you described are consistent with the interest rates for Parent Plus loans. Either Navient or Dept. of Education should be able to provide you with the original promissory note you signed for your federal loans.
One thing that may help is applying for the Income Contingent Repayment program, which is the only income-related program available for Parent Plus loans, or consolidations that included a Parent Plus loan. If the loans were originated in 2008 then you should be able to get on to Income Contingent Repayment, which may lower the payment amount (depending on your income) and also has limitations on the interest that can accrue.
Beyond that, I would recommend talking with the Navient Customer Advocate department to obtain past documentation.
I have a private student loan with Navient (Sallie Mae) I could not afford my monthly payments and let the loan default. I was contacted by Allied Interstate to either settle my loan or come up with a payment option. We worked out an agreement where I would pay $127 a month and can settle at any time (the amount to settle increases each year). Allied sent a letter that stated the interest rate on the Navient loan would be .01% and the amount I pay would go to the current interest/principle amount owed. When I log into my Navient account the interest rate is still 13.25% and I get late fees tacked on each month even though they are receiving the agreed monthly payment. The loan shows up as a closed write-off on my credit report. I’m just wondering why they haven’t changed the interest rate and stop the late payments like they were supposed to?
Hi Ashley, it sounds like you’re on the “interest rate reduction” payment plan with your defaulted Navient private student loans. The amount paid first goes to accrued interest and late fees from my understanding, and once/if that is paid down, it starts to go towards principal. This is a decent program but is more of a short term solution.
It also sounds like Allied has misled you about settlement possibilities. Unless the accounts are assigned to a collection attorney in your state, typically, acceptable settlement ranges decrease every year – not increase. The collector was probably saying this to set the tone for settlement negotiations if they occur down the road, so they can try to collect as much from you as they can. Allied Interstate doesn’t have the greatest reputation for being completely honest and forthcoming with borrowers.
As with any agreement, I would get this in writing if you haven’t already (for the payment plan).
When accounts default, there does seem to be a disconnect between Navient’s online portal and actions taken through collection agencies, so that may just be an error on the online portal.
The account will continue to show as charged off/defaulted until it is paid off or settled, and even then, it will show that in the past the loan had been in default.
If the collector said that this program would stop late payments or help your credit, that is the opposite of what I’ve seen with the interest rate reduction program on defaulted Navient private student loans.
It’s possible to bring a loan current again you enter into this program prior to default, but not if you’re already in default at the time you start the interest rate reduction program. This is just based on what I’ve heard from other borrowers, since I don’t directly assist with the interest rate reduction program (I think it’s a short term solution and that settlement is much better if possible).
I had my student loans through nelnet. Honestly I am not even sure at this moment what is private, fed, etc… I just know that I originally borrowed 24,000 and right now I owe roughly 45,000. A few years back half of my loans went to collections. I worked out the payment plan where I was told that I would pay on time for 9 months and after that it would go back to nelnet and I would just have 1 payment. Clearly I was either told wrong or misunderstood because after that 9 months it went to navient. So I had 2 different payments. I had put the other off as long as I could and continued to pay my tiny amount to Navient. So then of course my other half was just sent to collections. I haven’t even talked to them yet. So around 20,000 is on collections and 23, ish is with Navient. My Navient payment doesn’t even cover my interest so I will owe more every year. We really can’t afford more than what we pay, but we are considered a loan to pay off the school loans. Since I got these loans I did get married. My husband does ok, but he had his things before me, so that doesn’t mean he has a ton extra to be paying my loans. However he feels like if we take the payment we make and put that towards a loan, that we would at least have an end in site. So my question is, is it possible to settle with collections, navient, both, or neither. I saw something about 20%-50%. I would be pretty happy with 50% of the total and I think we could come up with that. I just wasn’t sure if either or both would work with me at all. I also saw you say something about Navient not settling as long as you have a job. My husband does and of course they can take his money, but I do not. And if my husband were to leave me, I would be a single mom of 3 children that doesn’t work. So would that be any leverage to say, “hey, take your money while you can now”?
Hi Nicole, Nelnet definitely sounds like a federal loan, and Navient services both federal and private loans; so I’d first recommend checking the federal student loan database at http://www.nslds.ed.gov to see if your loans are all showing up there.
If the Navient loans are not showing up (keep in mind they may be listed under the original names of the loans rather than the name of the servicer like Navient), then that is a good indicator that they are private.
Navient will not settle private loans for any significant reduction until they are defaulted, which involves credit damage for you and any cosigners as well as accrual of late fees and interest during the time period prior to default; so that’s something to consider if you’re going to try to “strategically default” on the loans in order to settle.
They have no incentive to accept a significantly reduced balance when the loan is current. At the lowest, I’ve seen them take 90% in a lump sum; or 85% in 3 payments if the private loan is a few months past due but not yet in default (for private loans).
The lowest settlement possible on a recently charged off Navient private loan is in the 40-45% range. You could try to wait longer on a smaller balance, but there’s still the chance that they could send the loan to a collection attorney and attempt legal action. This 40-45% number is based on the balance at the time of settlement, which will be larger than your current balance if you go into default, due to late fees and interest.
Lots of my clients had jobs or significant income when we settled for them, it all depends on what is disclosed during negotiations. For instance, if you tell them that you have a job and are making a good income, or that your husband does, they will use this information to try to pressure you into making payments or accepting a higher settlement. Knowing how, and when, to negotiate with a private lender is half the battle in obtaining a good settlement.
It’s a difficult process when you’re doing it on your own for the first time. Feel free to call in to the hotline to be connected with my office for a private student loan evaluation – but the first thing I’d recommend is checking the federal student loan database to make sure that the Navient loans are not federal, since federal loans rarely settle for any significant reduction even if you’re in default.
My daughter had a Sallie Mae loan for a medical program that she needed to drop out of due to financial reasons. Her high balance was $6,231 but they transferred the loan to EOS collections and they are wanting $7,619. She does not have the money to repay this in full as she is settling several other debts as well. What is the best way to settle with EOS (if she can). And will EOS continue to add interest? Also, how does she go about making sure the settlement is reported to credit agencies by EOS as promised. EOS is not showing up on her credit at this time but Sallie Mae is – how does she make sure that her loan is reported as paid once and if she can negotiate with EOS?
thank you
EOS is a federal loan guarantor/collector for the most part, so these loans are probably federal (but you can have her check at http://www.nslds.ed.gov to be sure).
Federal loans rarely settle for much of a reduction, it’s usually just a removal of fees and occasionally a reduction in accrued interest.
Late fees and accrued interest will continue to accumulate as long as the loan is in default, so if settlement isn’t an option (federal loans have to be settled in a lump sum), then she should consider using the free Direct Consolidation or Rehabilitation programs to get a federal loan out of default. I wrote in detail about both of these programs here:
https://blog.credit.com/2016/07/how-to-get-your-student-loans-out-of-default-without-getting-scammed-151236/
If she does do a settlement, it will likely be reported as such on her credit report by the federal loan guarantor or servicer. To ensure this, she’ll want to keep records of any documents used in the settlement including a written settlement letter. Federal loan settlement isn’t an option for most people though because they are usually 85-90% of the outstanding balance which has to be paid all at once (federal loans don’t offer structured settlements).
Hope this helps –
So – the day after I posted this, I saw the first private loan being collected by EOS CCA that I’ve seen in my career. There’s a small possibility that your daughters loans could be private, which could mean a much better settlement is possible.
I would still start with the NSLDS database to check if they are federal, and then proceed from that point. With that said, I’ve never seen a private Sallie Mae or Navient loan assigned to EOS CCA.
Hi,
I have both private and federal loans , $37,245 with sallie mae and the rest transfered over to Navient. The total balance for my navient is $127,949 which includes $55,701 ( federal loans) I have consolidated and put in income based repayment so the monthly for that is currently $0 . I still can’t afford to make the payments. which totals to about $1300 a month. I graduated in May 2016 and began repayment Jan 2017 and put both private loans in forbearance. I just called Sallie mae and the representative suggested I let my account go past due and when the sallie mae collections call ( approx in 9 days) that I can come to an agreement for repayment with them because he was unable to do so himself. He also stated that at that point they would not have reported anything to my credit because they only do that after 80 days or so. So my question is, is it smart to negotiate with the sallie mae collections that early? considering it won’t affect my credit..My other concern is that I have a cosigner on the loans and I cannot put their credit at risk so I feel like I’m in a tight spot where I can’t afford to make payments but can’t let it get delinquent , the forbearance is helping me now but what can i do to settle , is there any way I can negotiate a down payment and have a reasonable monthly payment? Im also looking to get a mortgage and don’t want to ruin my credit .
Hi Shahendah, in my experience in negotiating with Sallie Mae and Navient for the last 4 years, there are no major reductions until the account has defaulted after 6 months. Even then, it takes a while to negotiate a settlement with them, and it’s not easy.
All I can think that this rep is recommending is the short term solution of the “low interest rate payment plan”. This is a temporary solution and does not make much of a difference in the balance.
I am still a full time student and noticed my Navient loans have grown since I have started college 3 years ago. I am not waiting until I graduate to face these navient demons.
What can I do now? Can you help me negotiate or resolve, settle, my Navient nightmares?
Thanks for your help.
Hi Kelly, have you logged into NSLDS.ed.gov to see if these are federal loans showing up in the database? Or if they are private loans? Navient both services federal loans, and originates private loans; so it’s not always easy to tell which is which with Navient.
If the loans are private, settling them while in school won’t be easy. You’ll have to first convince Navient to remove your loans from any in-school deferment and into a repayment plans, possibly making one or two payments.
At that point, you’d have to do a strategic default; which involves significant credit damage for you and any cosigners. It’s impossible to settle a private loan without it being in default. But if the loans turn out to be federal, even a default won’t result in a significant settlement opportunity.
I commend you on getting a handle on these loans early on and noticing that the interest is accruing while you’re in school. Just based on that description, I think these could be private, but we need to confirm for sure. The easiest way to do that is to check the http://www.nslds.ed.gov database to see if they are showing up as federal loans.
Feel free to call in to the hotline and select “Option 4” to be connected with my office to schedule a further consultation.
Hi.
I’m 57 years old my daughter made private loans with Sallie Mae back in 2005. I did a Tution Student Loan in the amount of $43,000. She had been in and out of colleges and has made over $126,000 private loan and I’m joint with all the loans including my 43,000.00 which has turned into 83,000 over 11 years. I just recently came out of a chapter 13 which has all the loans on hold.
All the loans total to $203,000. There is 50,000 that is Federal.
Now they are asking to pay pre month $1300.00.
I have no clue what I have gotten myself into. I’m working and I don’t know what to do at this point. My daughter is not working.
Call in and talk to Andrew at 800-939-8357 ext 4. He can dig into your financial situation and help you identify the most workable plan for you from here.
Hi Laura, can you come up with half the private student loan amount to settle them? Chapter 13s without Adversary Proceedings tend to cause massive amounts of interest accrual on private loans.
The fed loans are easier to deal with and have more flexible repayment plans, but don’t settle for much.
I have private Navient (SallieMae) private loans and my 1% interest is $655 a month. While I was on disability at my job, I couldn’t make payments and my credit score dropped 200 points. I even let them know my situation. I can’t go back to paying $655 a month. I can’t afford to pay that much and still expect to pay my basic bills such as rent, gas, electricity etc. Is there anything I can do?
Can you afford to come up with 50-60 percent of the current balance to settle through strategic default?
No. 50-60% of my balance is 3x my yearly income. I can’t afford the 1% interest.
If you’re unable to afford the interest rate reduction program or a settlement, there aren’t many options. You could try entering into CH13 bankruptcy but this would cause the loan to grow even bigger unless you were able to get it discharged through an Adversary Proceeding, which requires a skilled student loan attorney. Unfortunately the attorneys who do attempt Adversary proceedings often charge a large retainer because of the amount of work involved.
I suppose the only other option is to just stop paying, but I don’t recommend doing that without a strategy and ultimate goal in mind such as settlement.
If you’re interest rate reduction program payments are $655, I’m assuming it’s a significant balance, so there’s a pretty good chance Navient would attempt legal action within a year or less of defaulting.
But – that may buy you time to save up some funds to put towards a lump sum or structured settlement.
I’m a parent who has private parent loans. I have just been downsized at work and will be unemployed soon. I have been current on payments until right now. I’m not sure if I let them go to default to negotiate or do I try paying them with my retirement savings. I feel I really have limited options. I’m 57 years old and would not have many years left to work anyway or repay over extended time
In situations like this I will often encourage looking at settling private student loans. I am not a fan of tapping retirement savings, but am also not a fan of collection lawsuits that can eventually happen, which adds to the costs and provides collectors legal rights I would prefer they not have.
Call in and talk to Andrew about your total situation at 800-939-8357 ext 4.
I agree with Michael. I think it depends on the amount of the loans, and if paying via some retirement savings would significantly hurt your retirement budget.
I have 8 private loans totaling 80k. I’m on the rate reduction and pay $450 a month. I was going to inherit my grandma’s house but a family member pulled some deathbed deed transfer and barring a 30-50k lawsuit, I’m SOL. There’s no way to repay this now that I’m going to have to pay for housing and I don’t know what to do. I doubt that they are going to write off such a large amount. I’m middle aged and unlikely to be earning much more than I currently do. My dad was planning on living with me but I was thinking about him getting a house using his VA loan and then I quit paying. I have about 30k saved and could settle for this amount. I’m just unsure about what to do because I was blindsided by the house situation. I was perfectly content to pay the $450 until I die because I had a house. I have really good credit and no other debt except for my monthly spending which I pay in full. I’m really jammed up. I feel hopeless.
Call in and consult with Andrew at 800-939-8357 ext 4 Hannah. He will help you come up with a strategy that works for you to reach your goals.
Hi Hannah, I think that amount would still work for a settlement but it may require a structured settlement with a down payment and a total of a 12-18 month structured settlement term. Feel free to call in and we can discuss further.
Hello,
Does Navient treat each loan separately? I have three private loans, two charged off and one in repayment. The two defaulted loans have past the California (where I got the loans in 2005 and where I currently live) statute of limitations and have fallen off my credit report- last payment in 2009 according to a credit report. They still appear on my account when I login to their website to pay the other loan so I’m concerned that each time I login it’s an acknowledgment of the defaulted/past SOL loans. No money ever goes to the defaulted loan. Any suggestions or comments would be greatly appreciated.
Thank you!
You are not reaging the statute of limitations for Navient to sue, or for credit reporting, by logging in to remit payment on a different account with them.
Thank you for your response. All your help here is appreciated!