If your student loans are still with Sallie Mae, then those are private student loans and they don't qualify for loan forgiveness. There are no loan forgiveness programs for private student loans. (There are, however, programs for loan discharge in situations where the primary borrower has suffered a total and permanent disability.)
But if your student loans started with Sallie Mae, but then were sent to Navient, those are likely federal student loans. And if they're federal student loans, they're eligible for various federal student loan forgiveness programs like:
- Public Service Loan Forgiveness Program
- Income-Based Repayment Loan Forgiveness and
- Teacher Loan Forgiveness
FYI, the PSLF Program forgives the remaining balance of your Direct Loans after you make 120 monthly payments while working full-time for the government or a non-profit organization.
The easiest way to find out the type of loans you have is to ask your loan servicer, Navient.
Ask them whether your loans are owned by the federal government or by a private lender.
What to do if you can't afford your Sallie Mae student loan payments?
Unlike the U.S. Department of Education, Sallie Mae doesn't offer repayment plans based on your income. Instead, they offer 2 repayment options:
- Graduated Repayment Period and
- Fixed Monthly Payments
The Graduated Repayment Period lets you make interest-only payments for the first 12 months after you leave full-time status at school. When those 12 months are up, your monthly payment will be for a fixed amount.
The Fixed Monthly Payment plan is just what it sounds like: you make fixed monthly payments until the loan is paid off.
Of course, neither of these plans help if your monthly payment is more than you can afford.
So what do you then?
The first thing most student loan borrowers do is ask for a deferment. But deferments don't lower your interest rate. And they don't stop your loan balance from growing. Just the opposite.
When you run out of deferments and you still can't afford your payments, your repayment options are limited. (For example, Smart Option borrowers are allowed five 12 month deferments.)
You could, of course, look into student loan refinancing with a different private lender. (In case you're wondering, you can't consolidate your private student loans into a federal student loan. Federal loan consolidation is limited to federal student loan debt.)
Depending on your credit score, you may qualify for low variable rates.
If refinancing isn't an option, then you're stuck.
You'll either keep making your student loan payments as agree or you'll start missing payments.
And if you start missing payments, your credit score, and your co-signer's credit score will take a hit. There's no way around it.
Repayment options for delinquent Sallie Mae loans
All isn't lost if you stop making on-time payments.
Sallie Mae offers delinquent borrowers 3 repayment options to help bring their account current:
- Interest Rate Reduction Program
- Term and Rate Modification
- 3 Pay
The Rate Reduction Program lowers your loan's interest rate and lets you make interest payments for a period of time (usually 6 to 12 months). This program benefits borrowers who are going through a temporary financial hardship.
The Term and Rate Modification is a student loan repayment program that lowers your interest rate and monthly payment for a limited time, but it also extends your loan term. So you'll end up paying more over the long term.
The 3Pay repayment program lets you bring your loan current by making payments that are equal to or greater than the current amount due for three consecutive months. As you can see, the main benefit of this program is bringing your account current.
Does Sallie Mae offer student loan settlements?
Once you default, you may be able to negotiate a settlement for around 40-75% of your loan balance.
Do you have to have that settlement amount in a lump sum?
While a lump sum is helpful, you may be able to negotiate a settlement for a lump sum plus monthly payments. Or, in rare instances, just monthly payments.
Click here to check out the student loan settlement process.