The names and details change, but the story I hear from my clients usually comes down to one thing: Student loan debt has a hold on their lives — their ability to pursue dreams, travel, start a business, own a home — and they want to break free.
My client Eddie B. told me straight up, “Being liberated from the debt of student loans will allow me to do what I want to do more freely and without obstacles.”
In Eddie’s settlement with Navient, we cut his private student loans from $68,897.80 to $20,000, which he’ll be able to pay off in two years.
Before Eddie reached out to me, he was looking at paying on those loans indefinitely.
Here’s how Eddie got free.
Somebody f----d Up … and it wasn’t Eddie
After Eddie got his undergrad degree, he wasn’t sure what he wanted to do next. He decided to enroll in grad school to study Spanish, but after about two weeks, he knew this wasn’t the right move for him. So he withdrew from grad school.
But the school didn’t process Eddie’s withdrawal properly. And as a result, both the school and the National Student Loan Data System still had Eddie listed as an enrolled student.
And then dealing with the student loan company was hard because you’d talk to this person, then this person, and then they’d pass you off to this other person. In the end, there was no one who could help.
And, since these were private student loans, they were unsubsidized. When a loan is unsubsidized, it continues to accrue interest, which is added to your principal balance. This is called capitalization.
So Eddie would be paying interest on interest, dramatically increasing the time he would need to pay off his student loans.
And the worst part? He didn’t even know this was happening because Navient, his loan provider, wasn’t sending him any bills … because they thought he was still enrolled in grad school.
It was years before Eddie received his first statement from Navient, and by that time his loan amount had tripled to over $60,000.
It could all be so simple...
In an ideal world, Eddie could simply let the school and Navient know that they had made a mistake, and in turn, they would correct his loan amount. But we don’t live in an ideal world.
“That process was very grueling,” Eddie said, “Constantly calling, constantly trying to reach out to people. I couldn’t just walk up to the financial aid office at the school, because I’m out of state. And then dealing with the student loan company was hard because you’d talk to this person, then this person, and then they’d pass you off to this other person. In the end, there was no one who could help.”
After about a month of trying, Eddie realized he had choices: He could continue to make payments for the rest of his life on a never-diminishing loan, or let the loan go into default.
Or, he could find some help. And that’s what he did.
Eddie did his homework
Before his cousin referred him to me for assistance, Eddie made some smart moves to lay the groundwork for success. These moves saved Eddie a lot of time, money and heartache in the long run. Here’s what Eddie did:
First, he did the math.
He assessed the financial burden his student loans would bring if he continued to make payments on the ever-growing $60K+ in loans, for the foreseeable future. Bottom line: thousands of dollars thrown into a bottomless pit, robbing him of his financial freedom.
Eddie knew that while hiring a lawyer to help would cost him upfront, it was the best financial decision in the long run because he would be free of his student loan debt in a much shorter amount of time.
Next, Eddie realized that his situation was more than just about the numbers.
He looked at what his current loan situation was costing him in terms of his lifestyle, unmet goals, and unfulfilled ambitions.
Finally, Eddie considered his student loan co-signer. Telling them that their credit score would also be impacted in the short-term as he worked out his student loan issues? Yeah, that wasn’t a conversation Eddie was looking forward to having.
Free at last
Once Eddie had done all he could on his own regarding his student loans, he reached out to me. I told him it would take us about a year to get everything resolved, and that’s exactly what it took.
In that time, we negotiate a student loan settlement with Navient for the following:
Instead of ~$70K, Eddie is obligated to pay back only $20 thousand in loans.
- After an initial upfront payment, he’ll make 22 more payments over the next two years -- less time, if he’s able to pay above the monthly payment amount we agreed upon.
- The settlement reflects thousands less in interest than what Eddie would’ve paid otherwise. Bonus: No further interest will accrue on Eddie’s loans, so he knows exactly what he has to pay.
- By the time Eddie is in his early 30s, he will be student loan free.
One last thing Eddie and I worked on:
How to explain both the costs and benefits of the settlement to his co-signer, who was already getting calls from Navient.
Eddie took control of the narrative by explaining in detail why our approach was best in the long run.
“It feels so liberating”
Eddie says, “Now that everything is done and settled, it feels so amazing and so liberating to finally have an end in sight, to see the light at the end of the tunnel.”
For Eddie, the “light” is investing in real estate and buying properties. Without the burden of mounting student loan debt, his future looks bright and free.