#1 Student Loan Lawyer
Updated on February 21, 2023
Sallie Mae doesn’t offer income-based repayment for private student loans. But they do offer repayment plans that lower your loan payments for a short period. More on that later.
But what if your loans were first with Sallie Mae but then were later sent to Navient, then your loans may be federal student loans.
And if they’re federal student loans, the loans are eligible for monthly payments under income-based repayment plans.
(Federal student loans are also eligible for loan forgiveness programs like the Public Service Loan Forgiveness Program.)
How to find out what type of student loans you have
You can find out what type of loans you have by contacting your loan servicer or checking studentaid.gov. That website has information about all the Federal Student Aid you received while in school.
Another way to check is if you have a cosigner. Typically, the U.S. Department of Education usually doesn’t require a cosigner before it makes a loan. Nor does the federal government check your credit score.
Private lenders, on the other hand, routinely require a cosigner to borrow student loan debt. And they also check your credit score to determine if you qualify for their loan programs and what your interest rate will be.
What to do if you can't afford the payments on your Sallie Mae student loans?
Although Sallie Mae doesn’t offer income-based repayment options, they do offer deferments and loan repayment terms that give you a lower monthly payment for a brief period.
For example, the Interest Rate Reduction Program lowers your interest rate and lets you make interest payments for 6 to 12 months.
FYI, enrolling in one of these interest repayment programs or taking deferments/forbearance makes you ineligible to get a cosigner release.
While a repayment option like this is great, it’s relief in lowering student loan payments is temporary.
This plan does nothing for you if you’re earning way less than you thought you would with the education you received.
If you have a persistent financial hardship, check to see what refinancing options you have available to you. Depending on your credit score, you may find private student loan lenders willing to give you better repayment terms (lower interest rate, longer repayment period, flexible payment plans, etc.).
What to do if you can't refinance your Sallie Mae student loans?
If you can’t find a private lender willing to refinance your student loan debt, your options are limited to:
struggling to make the payments demanded
stopping your payments altogether
negotiating a settlement or
Many student loan borrowers struggle for years to try and pay back what they borrowed. But no matter what they do, they simply can’t get ahead. Something always happens. Kids, divorce, injury, unemployment, etc.
At some point, they’ll have to decide whether it makes sense to stop making payments altogether.
When that happens, late fees are added to their loan balance and negative information is listed on their credit history. But that’s the worst that happens.
When you default on private loans, you don’t have to worry about wage garnishment or having your home taken. At least not at first.
Unlike the federal government, private student loan lenders can’t automatically garnish wages or place a lien on your home.
They first have to sue you and get a court order authorizing them to do those things.
The good thing that happens when you stop making payments is that student loan settlement typically becomes an option.
In the past, I’ve negotiated settlements with Navient, Wells Fargo, SoFi, etc.
In my experience, you won’t settle for pennies on the dollar.
Instead, you’ll likely negotiate a settlement for somewhere around 40-75% of the loan balance. (Sometimes lower; hardly ever higher.)
If a settlement isn’t an option, your last option may be filing bankruptcy to get rid of your student loan debt.
Despite what you heard, it’s not impossible to get rid of higher-education loans in bankruptcy. It’s just hard.
But in my experience, even if you can’t discharge your student loans, you may be able to negotiate a really good settlement.