Repayment Plans Can Come To Your Rescue
There are four of these, and each is meant to make it easier for you to meet your debt obligations. However, consider the pros and cons of each carefully, as choosing the right plan can make a huge difference to your current and future financial health. Here is what is available:
- The most frequently availed repayment plan, the IBR will bring down your monthly payments to a range of just 10%-15% of your discretionary income. You will have to make payments for 20-25 years at which time the remainder of the debt will be forgiven .
- While the other three plans in the list have an initial income requirement, the ICR is free of such conditions. So, just about anybody can avail of the plan as long as they are eligible for it. The ICR brings down the monthly payments to around 20% of your discretionary income and the loan is forgiven after 25 years of consistent payments.
- Almost the same as the IBR plan, PAYE also brings down your monthly loan payments to 10% of your discretionary income, and the remainder of the debt is forgiven if you are consistent with your payments for 20 years. Also known as the Obama Student Loan Forgiveness program, only loans are taken out after 2007 are eligible for PAYE.
Q Which Student Loan Borrowers Are Most Likely To Default
A. Accordingto researchby Judy Scott-Clayton of Columbia University, Black graduates with abachelors degree default at five times the rate of white bachelors graduates21%compared with 4%. Among all college students who started college in 200304 , 38% of Black students defaulted within 12 years, comparedto 12% of white students.
Part ofthe disparity is because Black students are more likely to attend for-profitcolleges, where almost half of students default within 12 years of collegeentry. And Black students borrow more and have lower levels of family income,wealth, and parental education. Even after accounting for types of schoolsattended, family background characteristics, and post-college income, however, thereremains an 11-percentage-point Blackwhite disparity in default rates.
What Forgiveness Options Do Sallie Mae Offer
SLM offer two in-school repayment options. These include 1) fixed repayment and 2) interest repayment .
But like so many, it can be a real struggle trying to keep up with your loan repayment plan because your overall cost also increases with interest . Monthly loan payments dont seem to scratch the surface of your current balance.
Its no wonder so many people contact me to ask about alternative student loan repayment options as a way to hack Sallie Mae, looking to explore all possible avenues including loan forgiveness programs. Unfortunately, private borrowers dont have the same flexibility as their federal counterparts.
Sallie Mae® is a private lender and as such does not offer any traditional forgiveness programs for private student loan borrowers, except for very rare cases such as the Career Education Corp fallout which, unlike other for-profit college regulatory lawsuits, dealt primarily with private loans.
In that ruling, it was Career Education Corp itself that is responsible for the forgiveness payments of the private loan borrowers took out. SLM, and its sister company Navient do sometimes offer settlements under certain conditions.
You might also want to consider student loan refinancing which can help you save a significant about of money. However you do need to pay very close attention to the rates.
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But Sallie Mae Loan Forgiveness Is Not Possible
Although it is not possible to have debt wiped off magically with a forgiveness program, you can make the repayment more manageable. There are several options available, but in a nutshell, they all, in some form or manner, increase the loan term while decreasing the monthly obligations towards it.
Do not underestimate the efficacy of these programs! They are proven to reduce instances of default. But Sallies been playing it dirty, so dont expect to hear about them from SLM Corporation. In fact, the lender was recently pulled up for not advising clients of these options, which would make their life and their finances far more manageable.
In case you are wondering why the lender would not be interested in collecting its money? Make no mistake they do want to collect. But they want to take the cake and they want the crumbs too. Now, these are no small crumbs.
Collections from student loan defaulters are big business for Sallie almost as big as the legit interest payments. To get a gist of what I am talking about, chew on this- They charge defaulters a 25% collection fee. Plus, they charge an additional 28% as a collection commission, even when they are collecting for themselves.
That is a cool 53% made without lending a penny for it! So, do you actually believe that they have the impetus to tell you about any repayment or debt management programs that will make it easier or simpler for you to meet your loan obligations?
What Are Available Payment Options For Sallie Mae Student Loans
Why dont you show your fancier effort to get rid of your student loan debts in this situation? Because its hard to deal with, or because you dont know what to do? Below we will provide all the information you need related to this topic.
Firstly, be aware of repayment options provided by Sallie Mae. It is also essential to understand how Sallie Mae works as a borrower and what you can do if you have payment issues.
The type of your private loan determines the repayment options of Sallie Mae. Sallie Mae repayment plans depend on the type of private student credit that you have. Lets look at some of the features of private student loans.
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Where To Start When Applying For Forbearance
If you want to apply for forbearance, get in touch with your lender. See what options are available and what the process is to apply. Its important to know about time limitations or good faith payments, particularly when dealing with Sallie Mae.
Additionally, while your payments are on pause, its likely interest will continue to accrue. This will add even more to your student loan balance.
Before choosing this option, weigh the costs of interest and the total of any good faith payments. Also, be mindful that there is a finite amount of months to put off payments. So, you want to make sure you really need it. If you do, forbearance can certainly help.
If You Want To Pay Off Your Loans Faster
Sallie Mae does not charge a prepayment penalty, which is a fee thats charged if you repay the loan ahead of schedule or refinance the loan. If your main goal is paying off your student loans faster while decreasing the total interest paid, refinancing to a new lender may be a good option to explore.
When refinancing, you can pick a different repayment term to maximize your interest savings. Lenders offer different interest rates for different terms. Generally, shorter terms have lower interest rates, and longer terms have higher interest rates. If your main goal is decreasing the interest rate, refinancing to a shorter-term loan can help you qualify for the lowest interest rate available.
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Sallie Mae Student Loan Forgiveness: How To Get It
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Sallie Mae rarely forgives the balances owed on its private student loans. But what if your loans used to be with Sallie Mae but were sent to Navient? In that case, you may qualify for the student loan forgiveness programs the U.S. Department of Education offers. To know what type of loans you have and what relief opportunities youâre eligible for, check the Federal Student Aid website, StudentAid.gov.
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 arenât eligible for those opportunities.
Struggling under the weight of your private loans? Settlement or student loan refinancing may be an option, depending on your finances. If youâd like help figuring out your options, schedule a call to speak with a student loan lawyer.
Sallie Mae Student Loans For Undergraduates
Sallie Mae undergraduate student loan service is possible to obtain for bachelors degree, and an associates degree or degree-granting certificated students. There are available full coverage of all student loans no matter including fixed or different interest rates.
Sallie Male grants a discount of 0.25 percent of the interest rate for automatic payment interest rate. Origination fee or penalty is no longer available.
Deferred payment option can be considered as a benefit for private student loan borrowers. Based on it, after graduating the university, you can make payments.
Remember that if you postpone your monthly payments, the unpaid interest will be included to your necessary amount at the end of the six-month grace period.
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What Are The Requirements To Get Student Loan Relief For Federal Student Loan Borrowers
- You had to enter student loan repayment on a Direct Loan or FFELP student loan before January 2015.
- You must have had at least one federal student loan that was eligible for income-driven repayment.
- You didnt enroll in income-driven repayment prior to forbearance.
Related:Student loan borrowers will get $15 billion of student loan cancellation.
Federal Employee Student Loan Repayment Program
The Federal student loan repayment program permits agencies to repay Federally insured student loans as a recruitment or retention incentive for candidates or current employees of the agency.
This plan allows Federal agencies to make payments to the loan holder of up to a maximum of $10,000 for an employee in a calendar year and a total of not more than $60,000 for any one employee.
It’s important to note that an employee receiving this benefit must sign a service agreement to remain in the service of the paying agency for a period of at least 3 years.
An employee must reimburse the paying agency for all benefits received if he or she is separated voluntarily or separated involuntarily for misconduct, unacceptable performance, or a negative suitability determination under 5 CFR part 731. In addition, an employee must maintain an acceptable level of performance in order to continue to receive repayment benefits.
Furthermore, you must sign up for this program when you’re hired. You can’t go back to your HR department after you’re already employed and ask for it.
You can learn more about this program here.
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Teacher Loan Forgiveness Program
Student loan forgiveness for teachers is neither generous nor easy to qualify for. Teachers can have up to $17,500 of their federal direct and Stafford student loans forgiven by teaching for five complete and consecutive academic years at a qualifying low-income school or educational service agency. Loans that were issued before Oct. 1, 1998, are not eligible.
You must be classified as a highly qualified teacher, which means having at least a bachelor’s degree and having full state certification. Only science and math teachers at the secondary level, and special education teachers at the elementary or secondary level, are eligible for $17,500 in forgiveness. Forgiveness is capped at $5,000 for other teachers.
You can qualify for both teacher and public service loan forgiveness , but you can’t use the same years of service to be eligible for both programs. So you’d need 15 years of teaching service to qualify for both programs, along with meeting all the specific requirements to earn each type of forgiveness.
The Federal Student Loan Pause Will Likely Be Extended Through The End Of 2022
White House officials are zeroing in on canceling $10,000 for all borrowers who earn less than $150,000 per year, CNBC reports, but the administration has yet to confirm such plans.
In April, the Department of Education extended the pause on student loan repayment, interest and collections through Aug. 31, 2022, but Michelle Dimino, a senior education policy leader at Third Way, predicts the payment pause will be extended yet again through the end of the year, at least until after the midterm elections.
A recent poll from Data for Progress and Rise found that voters might be less likely to vote in the midterms if the Biden administration fails to provide adequate relief to borrowers.
Cardona and other top Biden officials have also made it clear that they are comfortable extending the pause during interviews. “We’re going to continue to monitor it,” Cardona told Cox Media Group in April. “Right now, we have August 31 and as you’ve seen in the past, we’ve been comfortable moving that date if needed.”
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Unable To Repay Student Loans
If you cant pay the full amount due on time or have to miss a student loan payment, your loan may be considered delinquent and you may be charged late fees. Contact your loan servicer immediately for help, and ask them about your options.
Learn about COVID emergency relief for federal student loans that has been extended through January 31, 2022.
Navient Agrees To Erase $17 Billion In Private Student Loans For Nearly 66000 Borrowers
In a settlement announced today, Navient will erase nearly $66,000 in private student loans, ending years of legal battles with states. The settlement resolves claims that Navient steered struggling student loan borrowers into costly forbearances and income-driven repayment plans. It also addresses the interest that borrowers accrued while in forbearances. The settlement also resolves claims that Navient failed to provide borrowers with viable repayment options and offered unfair terms.
The settlement is a big win for consumers who have been struggling to make payments on their private student loans. Navient issued predatory loans to hundreds of thousands of borrowers who couldnt afford them. This drove many borrowers into forbearance, which prevented them from paying down the principal loan balance and accumulated debt. Now, the company will pay out $260 per private student loan borrower if the settlement is finalized.
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If Youre Struggling To Afford Your Monthly Payments
If youre having trouble making your monthly payments, consider one of the following options before you refinance.
Enroll in automatic payments to receive a rate discount
Sallie Mae offers a 0.25% interest rate discount when you sign up for automatic payments. The discount will be applied every month that you have autopay set up. Plus, signing up for autopay means you wont miss a monthly payment and incur late fees.
If you owe $50,000 in student loans with a 10% interest rate and a 10-year term, for example, you could save $828 in total interest over the life of the loan by signing up for autopay. While this isnt a huge difference, its relatively easy to implement and does save you money.
Just make sure you have the money in your account each month. If not, the automatic payment could bounce, incurring bank fees as well as fees on your loan.
Apply for Sallie Maes graduated repayment plan
Sallie Mae offers a graduated repayment plan for borrowers, which is not the same as the graduated repayment option available for federal student loans.
Sallie Maes graduated repayment program allows you to only make interest payments for 12 months while you regroup financially. To qualify for this program, you must be within six months of leaving school or ending the grace period.
You also must have one of the following types of Sallie Mae loans to qualify for deferment:
- Smart Option Student Loan
Debt Relief News: Sallie Mae Settles And Now $17 Billion In Student Loans To Be Forgiven
If you are burdened with Sallie Mae student loans, you may be able to have your loans discharged in bankruptcy. Note that in 2014, Sallie Mae created a new company called Navient Corporation to hold its loan portfolio and to operate its loan servicing business. Thus, if you ever had a Sallie Mae loan or had Sallie Mae conduct loan servicing, that loan and servicing, likely, was transferred to Navient. Further, Navient then changed its name in 2021 to Aidvantage. See here.
Whether called a “Sallie Mae” or “Navient” or “Aidvantage” loan, depending on the loan and the circumstances, debtors should contact experienced debt relief attorneys — like that at Guardian Litigation Group. The debts that are eligible for bankruptcy discharge are what are legally called “private student loans.” Unlike “regular” student loans, private loans are not backed by the federal government or other non-for-profit institutions. Thus, the bankruptcy nondischargeability rules for “regular” student loans do not apply to private student loans.
The important thing for other debtors is the legal precedent now set by this cases. Private student loans are dischargeable in bankruptcy and, pursuant to pending and future-filed litigation, those private student loans may be eligible for cancellation/forgiveness.
Contact an Experienced Debt Relief and Debtorsâ Rights Attorney
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Can Sallie Mae Loans Be Forgiven
Sallie Mae rarely forgives student loan debt. It expects borrowers and their cosigners to keep paying 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 you die. If granted, a disability discharge would wipe out the remaining loan balance.
The recent Navient lawsuit settlement doesnât 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.
