Student loans are tough, and they present borrowers with heavy debt burdens after college. But while there are a growing number of options available to consumers, most student loan forgiveness programs and other repayment plans are only available to those with federal student loans. Borrowers who are having difficulty with private student loans, from lenders like Sallie Mae, have fewer options. Today we are going to take a look at the programs available to private student loan borrowers.
We will analyze six of the top student loan servicers and give tips for how to pay off private student loans. Note about the updates: Since we first wrote this post, more information about the top private lenders and their repayment programs has become publicly available. But times have changed and the student loan crisis, the media coverage surrounding it, and government intervention have worked to create an environment of improved transparency and increased options for borrowers.
As of February , the post now contains new information about the three lenders that were originally listed here Discover, Wells Fargo and Sallie Mae , along with details about other big private lenders. Federal student loans are well-regulated and have structured programs to help borrowers. Even when consumers do struggle or fall behind, there are numerous resources available, and these resources are guaranteed.
Or, maybe you picked one who refuses to make any modifications or adjustments. In most cases, private student loans loans are already harder to pay due to higher interest rates, and when consumers fall behind they have no program or resource to help them re-establish their footing. For many, the payments are too challenging.
Of course, this issue has caught the interest of politicians and the Consumer Financial Protection Bureau. Thankfully, there are some options available for your private student loans. First, we will cover options that lenders offer, and then we will highlight some other resources. Sallie Mae handed off most of its older private loans to Navient after its split into two arms, but it still services loans, while also offering new student lending products.
In addition, it mentions its forbearance program, which can be used in three-month intervals for up to twelve months. This is certainly helpful for those who need it, although interest does accrue during the forbearance period and a collateral payment is required. Below are also some programs that Sallie Mae has offered in the past. Sallie Mae offers a six-month grace period after graduation.
Traditionally, the borrower would then have to begin making monthly payments that include principal and interest. Under the GRP, the borrower only has to pay accrued interest for the first 12 months of repayment. This means that recent graduates have 18 months before being required to pay toward the principal. Like with many repayment programs, this can lead to higher payments later and a more expensive total loan amount, but it helps consumers get on their feet after graduation.
This is particularly important for those who struggle to find work. One of the most successful programs Sallie Mae offers, this program offers lower interest rates, as low as 1 percent, and sometimes includes a modification of the loan term.
To qualify, borrowers must first make three consecutive on-time monthly payments at the reduced rate. Sallie Mae also offers reduced monthly payments, extended repayment schedules and, likely, some less-advertised hardship programs. In their letter to the CFPB, they also state that they are in favor of rehabilitation programs for private loans that can help borrowers recover from default.
Navient, the sister company of Sallie Mae, now holds and manages many of the private loans that were previously managed by Sallie Mae. Unfortunately, Navient keeps information about private loan repayment close to its chest. The good news, however, is that it appears that Navient does work to help borrowers who show the initiative to call in. Again, the transparency and information provided to private loan borrowers is disappointing. Navient does, however, make a point to refer clients to credit counseling.
This is a good sign that they understand the fact that student loan debt is often just a part of a larger debt crisis. By working to get credit card debt under better control, borrowers will likely improve their overall financial situations and free up more money for their student debt. However, what would be even more helpful are innovative programs designed to help repay private loans, so we hope Navient makes this information more available soon. For starters, Wells Fargo appears to have a generous forbearance policy for its private student loan borrowers.
Students who are interning, in a residency or fellowship, or enrolled less than half-time as a student might be able to qualify. However, the bank has also disclosed quite a few short- and long-term repayment options for struggling borrowers. The main options include:. Some of these are more vague than others, but it is clear that there are some options. The other, more significant program is relatively new.
The program allows certain borrowers to qualify for an interest rate reduction to make their payments more realistically affordable, based on their income. Here is additional information from the official press release :. Through the program, Wells Fargo private student loan customers experiencing a hardship will have their financial situation reviewed on an individual case-by-case basis to determine eligibility for a short- or long-term loan modification, as appropriate.
Borrowers interested in this program or others offered by Wells Fargo are encouraged to call in at Discover offers a variety of options to borrowers. One of the most basic options is deferment, and Discover extends deferment options to members of certain occupations, including those who are:.
In addition, they offer an extended grace period, which is simply a three-month addition to your current grace period. The other options include a payment extension the ability to catch up on missed payments , reduced monthly payment, forbearance, and a hardship program that involves an interest rate reduction.
You can read more about the specifics of these programs and how to qualify , but be sure to read the guidelines from the CFPB below, too. In addition to these traditional programs, Discover also has plans to launch a formal student loan repayment assistance program later this year.
For starters, read this Wall Street Journal article which covers some under publicized programs being offered to borrowers at Discover and speculates about upcoming repayment options. If you are a struggling Discover borrower, you may want to call in and inquire about these programs immediately.
What I gathered was that there is a standard six-month grace period, but that PNC does have an extended grace period of six additional months. There is also a forbearance option, and all available forbearance time must be used before PNC will work with the borrower in a modification program. A customer service rep who spoke with me on the phone recommended reaching out to those agencies to learn more about particular programs that may be available.
Like PNC, RBS also offers a year term loan, which again offers a lower monthly payment at the cost of paying more in interest. She did, however, give me a number to call, but the representative on the phone only informed me of the same three options, along with what sounded like standard forbearance and grace period programs. This one is worth some additional research, and we will update the post if we receive any new information.
We have seen that private student loan companies offer a variety of repayment options that you may not have known about. While some lenders publish their repayment options publicly, others keep this information private. Luckily, more and more has become public since our first version of this article in Instead, it means that the most important rule about paying off private student loans is that you need to communicate with your lender!
As we have shown, most lenders are willing to help you and might have some sympathy for your economic difficulty. We encourage you to call early and often during your period of financial difficulty and to explain your situation thoroughly when you ask for help.
In addition to updates from the financial institutions, the CFPB has also taken a tougher stance and provided more guidance since we first wrote our article. For example, our analysis of complaints reveals that many of you tried to find out more information by calling your lender or servicer, but received conflicting or inaccurate information as you were bounced between call center staff.
Many of you told us how you were provided no option at all, driving you into default, even though a reduced payment plan might be in the best interest of both you and your lender. One solution to this predicament might be to arm yourself with even more information when you make contact with your lender. Having the ability to present more concrete evidence of your financial standing could help you make a stronger case.
The CFPB says:. Some student loan companies have told us that they may ask for recent pay stubs or a bank statement to verify income and expenses. Having these documents handy could pay big dividends, and offering them before they are requested could also get the conversation started.
Another important point is to keep in mind the power of physical mail. This is particularly challenging for millennials, who prefer electronic communication, but ironically they are the group most negatively impacted and frustrated by this private student loan debacle. Download the letter, fill out the appropriate information, and send it to your servicer. Keep scanned copies of everything you send. This could be a powerful tool in getting a response, including some options that have not been presented to you via telephone.
If you try this approach, please come back and let us know how things turn out by adding a comment below. If you are still struggling, there are two more options to consider. First, if you feel that your loan servicer has broken the agreement or terms of your loan, you can contact the Consumer Financial Protection Bureau.
If you file a formal complaint with the CFPB , they may be able to help. Secondly, you should leverage the flexibility of your federal student loans by enrolling them in repayment programs. In most cases, this will allow you to have lower monthly payments for your federal loans, and this will free up more money to put toward Sallie Mae or other private loans.
Ideally, this will help you pay off your private student loan debt completely, and then you can focus on the federal loans. One of the best ways to learn about federal student loan programs is by talking to a student loan counselor.
Clearpoint offers this service, and a counselor will help identify your best repayment options, review your budget, and give insight into your credit. Learn More. We hope you can put these strategies to work.
For more information or help with your student loans, call us at or click here to schedule a student loan counseling session. A counselor can explain which options are right for you and make other personalized suggestions for your finances. Get the latest credit news and money management tips from Clearpoint and Money Management International—sent weekly to your inbox.
Great article. I know this is an old article but I hope somebody still responds or can comment. My daughter and I both have student loans and we both experience hardships. I co-signed two of my daughters loans and she only was able to her loans into forbearance since they excused that I can pay for her loans now.
What are our options? I can hardly make it as a single mom of 3 and my student loans are coming due now as well. Hi Mabel! We offer free credit counseling here at Clearpoint over the phone, face-to-face, or online. I know your article is a few years old and my son and me as his co-signor are in alot of debt with Sallie Mae with student loans. Are there any updates to this article? We are in forbearance right now and running into the last quarter and not sure what to do after that point.
My son did get a job in his field out of college but unfortunately does not pay enough to manage his Sallie Mae loans. He is also pay his Navient under the IDR program for now. Forbearance is done and not sure if the next step is defaulting which in the long run will hurt us both.
Do you have any suggestions? Thank you. Hi Eileen! The information in this article is totally up-to-date! I hope that helps! Sallie maes so called reduction interest plan is not that at all. They say they are reducing your interest but what they are doing is taking the monthly amount that you save and putting it into the back of the loan.
It is a shame that Navient has no options for loan reduction or other options such as going from variable interest rate to fixed interest rate. I called them about settlement options. Forget calling on that issue cause it is not happening.
They want every dime of the loan. Sometimes I do not blame folks who turn delinquent for not paying their loans. I have two children that have multiple student loans, most of them private.
I am wanting to try and get those loans consolidated for one easy payment. We have decided the best strategy would be for us to help them some with the payment but would like to get it all on one loan if possible.
Just not sure the best way to approach. That thinking makes sense, and a single payment would certainly be more convenient. However, we strongly recommend NOT consolidating the federal and private loans together you say most are private, so consider consolidating those and leaving the federal alone. The federal loans have great safety nets. To get started, you might try companies like SoFi and see how low of a rate you can get. There is no alternate program once you are in their system — they do not refi, consolidate, reduce, nothing.
You are stuck with what you agreed on at the time you took the loan out. Check every detail with any loan company you choose. Sallie Mae in my opinion is probably the worst — they usually charge very high interest to kids who need the loan to get into school, but will not work with them later to make the payments affordable. Sallie Mae does do a reduction in interest however, you will need to have your co-signer call as well with their financial information as well.
The phone calls last about 2 hours each and are very painful and absolutely awful but we finally did prove that we do not have the income to make the payments they were requiring. The interest rate was reduced for 2 years. Hi I have a degree from the art institute for a Bachelor degree in audio. I owe Navient , The best I could get from them is get a rate reduction plan for 1 year.
When I enrolled the student adviser garanteed that all graduated were working in the field, which was a big lie. The classes were many times the same class with a different name.
I was laid off from my job as a product line manager for an audio product, but the product was discontinued and I lost the name. Absolutely zero. So there is no end in site. I have a Navient Loan, and I am on an income based payment where I send in 1 time a year a renewal for this, and there have been a couple years where I have not had to pay anything, and after 10 years of this payment and non payment the loans will be forgiven.
Look into it! It is worth it.. I recently was granted an extended repayment modification through Navient, who services my Sallie Mae student loans. It took about 5 minutes through a phone call to a normal customer service rep. I had to specifically request it. This was a life saver.
Remember, you have to request it. Good luck! I am up on my 5 years of teaching math in a title 1 school. I have my largest student loan through Wells Fargo. Do they accept the teacher loan forgiveness? Since they are a private lender, unfortunately they likely do not offer that program or anything like it. Why is this? Can you consolidate one Navient loan to one Nelnet loan essentially refinance it?
Or does it have to be multiple loans to one loan? The obvious answer is that they are making more money on the higher interest rates that they are charging. But even people who do refinance successfully have paid a good chunk to them first. I imagine that you can refinance one loan at a time, though that will vary by each company and their terms. Is it possible to consolidate private student loans from Sallie Mae and AES along with a personal credit card in order to make one payment for the entire debt a month?
That should be possible. The question is though will you get terms that are really worthwhile, or might you be able to save hundreds or thousands of dollars by doing them separately. I have asked this same question. As of February of this year , Navient no longer accepts credit cards as forms of payment…..
Once student has completed his study and got good job, after that only he should pay off loan amount. For instance, paying off loans while still in school can be a smart strategy in some cases. Main drawback I can think of is that refinancing the private loan might still get you a better deal that could save you significantly in interest. The SoFi comment sounds interesting. My Granddaughter has 75, in private SallieMae loans and I am co-signer.
This has jammed my credit unfortunately. I would like to help her to work the 4 loans into one acceptable payment. With the private loan they tell me it cannot happen. If Sofi can help please tell me how. Yes, SoFi or other refinance companies can be a great option! You would need to contact them directly and apply. Sofi, as with most of the companies out there who offer to refi school loans privately, will not refi anything other than a bachelor degree loan.
So those of you with Tech Certificates or Associates Degrees are out of luck even though it may have cost you a pretty penny to get where you are. Based on the numbers above, you are facing an uphill battle, but you definitely have options. Bankruptcy is very tough to qualify for with your student loans, but some have chosen to pursue it. And, it definitely may be a viable option for your credit cards. Then, step back and assess your career mobility. Maybe you can move to a bigger city, or just get a few more jobs under your belt and then your income can creep up significantly.
Who do you recommend to use for refinancing both private and public loans? I have managed to pay on time up until now so my credit is still good, but I am a now a single mother of 3.
SoFi is the way to go!!! I honestly love them. I made payments while in school. Finally, I made the switch to Sofi. They are amazing. Since switching, I have even received two gifts from SoFi. My payments are several hundred dollars lower per month. Not to mention a fixed lower interest rate. Everyone I have spoken to at SoFi, has been helpful and kind.
They are awesome!!! Just Wow!!! The agreement was to pay it off by That is a very bizarre situation, David. If you can verify that the servicer is not proceeding with your loan as agreed upon, I strongly encourage you to file a complaint with the CFPB. That might not only help you, but others too. I am having a hard time finding a lender that will refinance my private student loans. The lender that I have for majority of my loans is American Education Services.
Because I have used all of my options for lower payments, I am no longer eligible for anymore payment plans. AES will not work with me to lower my payments. I can not refinance my loans because my credit is not good enough but it is not bad- Maybe my credit would be better if they would lower my payments so I can pay them on time.
This system wants people to stay in debt! It make logical sense to me that allowing more flexible payment options would create less issues for them as a lender as well. I would rather have someone pay me a smaller amount then not pay at all. Getting private student loans is something I will always regret. I appreciate the opportunity to express my frustration and if you have any suggestion, please let me know.
Thank you! Hi Kodi, I totally hear where you are coming from and am sorry about the challenges you are facing. You are absolutely right that it creates a cycle. You might be able to try some alternative refinancing companies, like Pave, which make their decisions on more of a personal level. And, hopefully your credit score will keep improving and you can make the climb to I took out a student loan for 15k and by the time I pay it off I will have paid 60k!!!
By the time I started paying interest already built up and my loan balance was at 25k! I wish I knew then what I know now. Sorry to hear that Jami, but it sounds like you are on the right track toward paying them off.
If interest rates are the problem, you might want to consider refinancing if your credit will qualify you. Have you ever heard of Student Loan Help Group? I received an email to my school email.
I am a teacher and their offer was to help me qualify for the Teacher Loan Forgiveness program. According to Student Loan Help Group, their program pays off the private student loan amount and then I could make on time payments based on my income and have the rest of my loans forgiven.
Not sure if I should work with this company, but I am desperate to have the majority of my loans forgiven. Thanks for your advice. To me it is a red flag to think that a third party would be able to help you get forgiveness for these private loans. For this to add up to your and their benefit, they would need to pay off your loan at a reduced amount from Sallie Mae, so that by the time you made payments to them, you would have paid more toward the loan than they paid to pay it off essentially purchasing it.
Have they given you any info on what your payments would be? The setup fee is also troubling. I would do additional research on the company before moving forward. Best of luck! I noticed that during the last few years my loans interest rate increases when my credit score increases.
I was also a bit confused about why Navient can charge interest for the original amount of money borrowed. Wow—very interesting observations! My guess is that the correlation between interest rates and credit scores is coincidental.
I guess those are variable rate loans, and the change just so happens to occur in close proximity to your score. As for the point about interest growth, that does sound alarming. Assuming a stable interest rate and high enough monthly payment, each payment should be sending more to the balance and less to interest as you go.
There are some forgiveness options available on federal loans, and yes Navient is one federal servicer. You will need to make sure the loans in question are federal loans.
Hi, I appreciate this information, but is there any other options? The forgiveness program is for public service, as I am in social work. Paying one month of my student loans would be half my income every month.
Any suggestions? Sincerely, Shannon. I totally hear where you are coming from, and I share your sentiments that there should be more options for private loans, which often have some unrealistic repayment plans! I think your best bet is to call your lender and see what they can do. My son is staring down , plus in Sallie Mae loans — the repayment is astronomical and there is no way to pay the a month payment.
He is unemployed and struggling to find work. I agree that refinancing is often a great if not the best option for private loans.
He may need your help cosigning to qualify, so I would just be careful about proceeding there and make sure you understand all the risks and how each and every one of you will be affected. For more detailed advice you can certainly reach out to one of our counselors.
BUT, there are other ways to refinance loans, which may be more favorable to you. I have a couple of questions… When one of these online schools convinces people that they will find you a job and contacts Sallie Mae themselves, with your highschool records… Is it the schools responsibility to be sure that the diploma is accredited in the state that you live in?
Does SallieMae ever actually look at your past records? No GED, because the class for that was taken online and later to find out that it was not accredited in all states. You may want to contact them or the school for more information, and depending on the severity of the situation you could also consider getting legal advice. I want to buy a house so would it affect me if a settle with them? Settling a debt will have a negative impact on a credit score, but so will missed payments and a delinquent status.
Why do we have to pay for education, education should be fully government funded. If that occurs, be sure to get the agreement in writing. You may want to consult legal advice as well.
I read the article and a few of the many, many comments on here. My mom and I have both talked to Sallie Mae about lowering their payments after the six months was up. Should I still try or what?
I wish I had better advice, but my only real suggestion here is to continue communicating with Sallie Mae, and document your overall financial situation for them. In addition, please be careful when working with any third parties. I secured 3 private loans from Sallie Mae to obtain my Masters degree in seminary.
I currently work full-time as a teacher and part-time as a youth pastor. Also, if your credit is good, refinancing might be a good way to go here, so be sure to look into that as well. I am so glad that I found this website. I have a private loan with Sallie Mae, Navient now holds the loans. I had 3 separate loans and one of them is in default and sold to a collection agency. I know my credit is already damaged. The collection agency agreed to settle one loan that had a balance of to My other two loans with Navient are still with them and in forebearance and I am making payments on those.
My question is, I do have the and plan on paying that. I was contemplating paying off the entire , but does it really matter at this point if I do?
My intention with any extra money I had was to put that towards my other loans that are not in a negative status. I know the damage is done, but if paying off the full would help a little of the damage control, that was my plan.
One other thing you might try is sending a written request about adjusting the credit report status do this before you pay them, if there is still time. Please keep in mind that this is just my good faith advice, based on what I know of your situation. My husband and I are deeply distraught over these student loans. We went to buy our first house and found that his credit score was not great.
Long story short we found out his parents took out k in sallie mae loans that are now under navient. My husband was unaware at the time of the amount because they just sent him what was needed for school.
After a long talk with his mother she admitted they used the student loan money on 2 vacations to Colorado, laptops for their other two children, and the building of a two story garage at their home. In short, his parents have divorced and they are no longer able or willing to pay on these loans. There is absolutely no way we can afford to pay these off. We have 2 young children, a house, and what we thought was a comfy future. I have student loans with Sallie Mae that are now with Navient.
I would like to negotiate a lump sum payment to Navient for my student loans to remove interest. Is this something I can do or should i contact an attorney. Yes, I recommend contacting them with specifics about your situation, including documentation of your income. My monthly dilemma is pay student loan or move forward with my life get a house or apartment, etc.
This has really stopped my generation Millennials from moving forward. ACS compounds interest daily so the only way to pay ahead straight to the principle is to pay the additional as close to the payment date as possible. Continue to contact ACS to ask for better arrangements. Consider mailing them like the article describes and documenting your income situation thoroughly.
On top of that, if you can get a stable nonprofit job, you may qualify for federal loan forgiveness, which would enable you more than likely to put more cash toward the private loans. I just want to share my student loan nightmare story and see if you could possibly give me any advice. I have not had a problem with them yet. The other very large loan I have which accounts for the majority of my problems is with NJ Higher Education.
It is broken into 4 different loans which need to be paid monthly. I have to buy my own food and pay my own expenses car insurance, cell phone, etc. They are not cutting me any breaks to live with them. I recently found out that my parents missed 7 months of loan payments and it was about to go into default. So I asked to be put in forbearance which was approved. After the fact, I found out that the loan payment after my forbearance was complete would be higher than my original rate.
Are they kidding me? So I agreed to make interest payments on my loan and I would need to pay interest on 1 loan monthly and on the other 3 loans I would pay it quarterly every 3 months.
I have been on the phone with them in tears, not able to breath pleading my case and all they can say is we need the payment in 30 days. My loan payment is due April 9 and I am not able to pay it.
What are my options? I have tried to decrease the payment amount but they wont do that because the loan has been passed due. I have tried paying the back payments in a 6 month period but they will not do that. They will literally not do anything to help me. So the next step might be to send a letter like the blog post suggests. That might get you into a more formal process. My wife and I both became doctors. We did not come from wealthy families, no one in our family was a doctor and I worked a full time in high-school, 2 full time jobs in college.
That is not a misprint. We cant afford payment and they wont help. This will take 50 years and with the interest its impossible. Teacher, doctors, PHD individuals etc.. They do not pay private loans even if you served in under serviced areas, free clinics, volunteered, donated, payments are not tax deductible. I have been dealing with Sallie Mae for 4 years now and I am disgusted with the way you are treated sometimes and certainly they can Never help make anything better.
The End! Does the website give you a pay-off amount that is good through a certain date? If not, you'll want to call and get a pay-off amount for a date that is far enough in the future that you can expect the payment to arrive by then. Sending that amount will ensure you don't wind up with a small amount of interest outstanding and have to make a second payment.
You will also want to make sure that the payment is applied to your principal balance, rather than just extending the payment due date. I would think this would happen automatically when the amount paid is enough to pay the loan off, but make sure you designate the payment that way, and then once it posts, make sure it was applied properly. I would guess that most of the "horror stories" you've read relate to one of those two things.
It would be very easy for a small amount to go unnoticed until it becomes past due and cause damage to your credit, or for the loan to be applied as future payments, allowing interest to continue to accrue and resulting in extra costs and possibly a past due amount in the future. If you have concerns or something doesn't look right, call Sallie Mae to discuss it immediately and keep good documentation of everything related to the transaction, that way, if there is a mistake, you have the tools to get it corrected.
You'll also want to stay on top of things until the loan shows fully paid and closed. How do I make sure of this? Do i add a payment note when paying online?
Or it it better to call them and pay on the phone not sure if Sallie mae have that? Most horror stories I read are for payments not applied to the princple, but counted as "future payment reserves". For my loans with Sallie Mae, when I go to make a payment, there is an option to either apply my extra payment to principal or to apply it to my next payment. Jada discusses how to pay off your student loans. Related topics. Ways to make your student loan payments Select how you want to make student loan payments.
App Store is a service mark of Apple Inc.
0コメント