Are Sallie Mae Loans Eligible for Loan Forgiveness?

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Updated on July 15, 2023

Sallie Mae rarely forgives the balances owed on its private student loans. But what if your loans were transferred to Navient from  Sallie Mae? In that case, you may qualify for the student loan forgiveness programs that the U.S. Department of Education offers. To know what type of loans you have and what relief opportunities you’re eligible for, check the Federal Student Aid website,

Federal loans qualify for cancellation programs like Public Service Loan Forgiveness, income-driven repayment forgiveness, and Teacher Loan Forgiveness. The private loans Sallie Mae owns and services aren’t eligible for those opportunities — also, any loans that would qualify for the Navient settlement or borrower defense to repayment were transferred to other servicers years ago.

Struggling under the weight of your private loans? Settlement or student loan refinancing may be an option, depending on your finances. If you’d like help figuring out your options, schedule a call to speak with a student loan lawyer.

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Can Sallie Mae loans be forgiven?

Sallie Mae rarely forgives student loan debt. It expects borrowers and their cosigners to continue to pay the loans whether they work in public service, have been paying for years, or suffer a financial hardship that makes it impossible to keep up with the monthly payments. The only time Sallie Mae will let you off the hook is if you suffer a permanent disability, physical or mental, that prevents you from working — or if you die. If granted, a disability discharge would wipe out the remaining loan balance.

The recent Navient lawsuit settlement doesn’t help: it applies only to federal student loans and private loans that Sallie Mae moved to Navient years ago.

Nor does the deal the Education Department struck last month to cancel $6 billion in loans for defrauded borrowers. Only federal student loan borrowers will benefit from that deal. Read more about borrower defense to repayment.

Will Sallie Mae loans be forgiven?

If the White House passes sweeping student loan forgiveness, it’s unlikely that borrowers who have loans with Sallie Mae will benefit.

Private student loan borrowers account for roughly 8% of the $1.71 trillion overall student debt in the United States. They are, nevertheless, left out of the student loan forgiveness plans promoted by democratic senators such as Chuck Schumer and Elizabeth Warren. The relief they’re pushing would apply only to those owing federal student loans.

Similarly, the relief initiatives authorized by the Biden administration throughout the pandemic — the student loan moratorium, PSLF Waiver, IDR account adjustment, and so on — have been restricted to borrowers with loans held by the Education Department.

Given the government’s record of restricting relief to federal student loan debt, Sallie Mae loans are unlikely to be forgiven.

Learn More: Student Loan Forgiveness Programs

Sallie Mae moved loans to Navient

Until a few years ago, Sallie Mae was America’s largest student loan company. It was a lender and debt collector, making money on both sides of its loans. But then the federal government cut off the federal subsidies and guarantees Sallie Mae feasted on for years.  This caused the company to spin off its Federal Family Education Loans and some predatory private loans to a new student loan servicer it created, Navient.

After that change, Sallie Mae focused on offering borrowers private student loans and student loan refinancing options.

Here’s how to know if your Sallie Mae loan is federal or private:

  • If Sallie Mae has your student loans today, then those are private student loans.

  • If Sallie Mae moved your loans to Navient, those might be federal FFEL Loans or private loans.

  • If Navient moved your loans to Aidvantage, then those are federal loans.

Learn More: How to Get Rid of Private Student Loans

Options if you can’t afford Sallie Mae loans

  • Pause student loan payments temporarily. Sallie Mae will let you pause payments temporarily with a deferment if your income drops because you’re returning to school or are still in residency. But if you’re struggling to make the monthly payments and are nearing delinquency due to job loss or a change of income, the company doesn’t typically grant forbearance opportunities like the ones offered by government and some private lenders.

  • Ask for an interest rate reduction. Even if forbearances are hard to come by, Sallie Mae will generally allow you to get a more budget-friendly payment amount by temporarily lowering your interest rate a few points. Another short-term option is to make interest payments while you work on improving your financial situation.

  • Refinance for a lower interest rate. Student loan refinance can help lower your interest rate and extend your repayment period, depending on your credit score and income. Use an online marketplace like Credible to shop around. Note: After historic lows throughout the federal student loan payment pause, refinancing rates have crept up. If you’re going to refinance, do it sooner rather than later. Related: How to Consolidate Sallie Mae Student Loans

  • File student loan bankruptcy. If you’ve exhausted your repayment options and refinancing is off the table, filing bankruptcy may be your only option for a long-term solution. Student loan discharges due to bankruptcy are scarce, but not impossible — you must file a lawsuit known as an adversary proceeding and prove the loans pose an undue hardship. Recent bankruptcy court decisions and lawmakers’ backing of relief for overburdened borrowers suggest that things might change for private student debt. Read more about private student loan bankruptcy.

Related: What Happens if You Default on a Sallie Mae Student Loan?

Bottom Line

Although Sallie Mae borrowers can’t count on blanket student loan forgiveness to erase their debt, there are steps they can take to make their loans more manageable. Let’s talk if you want to find a way to get rid of your student debt quickly.

Schedule a phone call with me. I’m a lawyer with years of experience helping people deal with their loans so they can achieve their personal goals: start a family, buy a house, retire, and so on.

UP NEXT: Private Student Loan Forgiveness Programs

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