Dealing with Sallie Mae Private Student Loans

Sallie Mae Private Student Loans

Managing federal student loan debt is complicated enough. But as many people have learned the hard way, navigating the world of private student loan debt can be quite a bit worse. Particularly if we’re talking about Sallie Mae private student loans.

The good news is I’ve had multiple clients successfully lower their monthly payments, as well as their interest rates, for their Sallie Mae private student loans. The process is definitely not easy, but it does seem to work for those who persevere. If you’re one of the unlucky college graduates dealing with Sallie Mae’s nonsense, there may be some degree of hope. Here’s a step-by-step plan for regaining control of your Sallie Mae private student loans.

1. Identify Which Loans Are Which

You may have both federal and private loans through Sallie Mae, which often adds to the confusion. The easiest way to resolve this is to complete a Federal Direct Consolidation on your federal student loans. This is a great way to streamline your federal loans, and to simplify your monthly payments. You may also qualify for lower monthly payments through the Income Based or Pay As You Earn Repayment Plans.

2. Gather Documents to Prove You Are Experiencing Financial Hardship

Once you know which loans are private, you’ll need to figure out exactly why they are unaffordable. This requires determining the following:

  • Total amount of Sallie Mae private student loans
  • Interest rates associated with each loan
  • Total monthly payment amount

In addition to the above information regarding your loans, you also need to gather information about your current financial situation. This includes:

  • Annual salary
  • Monthly take-home pay (after taxes and deductions)
  • Any savings account balances
  • Total fixed expenses (rent, utilities, cable, cell phone, etc.)
  • Other student loan payments (federal loans, other private loans)
  • Total necessary spending (average cost of groceries, transportation costs, etc.)

The more information you have the better. You need to be able to prove that your private student loan payments to Sallie Mae are unaffordable based on your current income and expenses.

3. Call, Call, and Call Again

Call Sallie Mae and explain your predicament to the person who answers the phone. If they aren’t helpful, politely ask to speak to a supervisor. If no one is in a helpful mood that day, politely end the call. The key is to always keep your cool and be as polite as possible. There is a solution, and you will find it, but it may not happen right away. Stay positive, and keep trying. Eventually you will connect with a customer service representative who is competent and compassionate enough to help you.

If you aren’t sure what to say, try something along these lines:

“I am doing my best to stay current on my Sallie Mae private student loans, but the payments are simply more than I can afford. I would like to find a long-term solution to make sure I am able to fulfill my obligation to Sallie Mae. I am interested in having my situation evaluated for the Rates and Reduction program. Is there someone I can speak to about that?”

If you are consistently unable to get the assistance you need, you can try calling the Rates and Reduction program directly at 1-877-770-4157. Or, for already established accounts try: 1-877-905-4527 or 1-877-494-3759. (These numbers seem to change periodically. If you do get through to someone, make sure to confirm the direct number for future reference. And if it’s different from the ones I have listed here, please send me an email with the updated number if you don’t mind.)

I’ve seen clients reduce their interest rates from variable double-digit rates down to a fixed rate between 1% to 5%. Actual results will vary, and not everyone will qualify for financial hardship. However, If you are truly struggling to afford your payments while keeping up with your other bills, this may very well be the solution you’ve been looking for. It’s certainly worth a try.

(Huge thanks to Holly and Wendy for helping me keep the Rates and Reductions phone numbers current!)

12 Responses to “Dealing with Sallie Mae Private Student Loans”

  1. Hi Lauren,

    I’ve been struggling with my Salliemae payments. I owe still more than 70K in Salliemae loans where before was over 100K due to the high interest rates. I pay over $700 each month on loans and try to pay more because when I examined how much interest built each day, it was a womping $30 per day. It still feels like a dent has not been made and that I constantly have an anchor on me. I feel I cannot get anywhere with my life because of these private loans. Back before picking a college, no one tells you about interest rates, federal loans compared to private loans, or how much you may possibly be making after college. Some parents do inform their children, but my parents did not even receive a college education. You don’t even think about interest rates or payments when you’re in college. Sadly, after graduating is when the downhill begins if you owe many private loans.

    I’ve tried calling that number to lower the interest rate but it’s constantly busy. I wanted to know if there’s anyway or any help I can get to deal with private loans. I do not make much and I feel drained and constantly think about these loans. I feel I cannot even start my life or do anything I want to do due to the loans. I’ve disappointed my parents but worse, I am disappointed in myself for making bad decisions. I want to see if I can change my situation, and ask you for some advice. Please let me know if there’s any possible way to help in my situation.

    -Jennifer

    Reply

  2. Thanks for this! I’m going to try it – I’ve been faithfully paying on my 9.75% interest rate for three years.

    Reply

  3. I posted this on a Anti-SM Facebook page:

    I became unemployed on 11/29/2013. Today, after realizing I will not find a job like I hoped in time for my payment, I googled ways to defer my loans. I came upon this website. It gives a number to a department that will possibly allow you to lessen the interest on your private loans.

    I called this number and the lady was, in lack of better terms, a “see you next tuesday” to say the least. She kept asking me where I got the number and talking down to me.

    There is no temporary deferrment for private loans for unemployment nor are you eligible for the “program” unless you have income. I said that I do not have a job and am not getting money from anywhere. She said that she would need to talk to myself and the cosigner to see “where the money to pay my loans is coming from”.

    Basically, you are required to make payment whether you have a job or not. They don’t care where you get the money or how, they want their money and if you don’t pay it, they will hound you. I just made my payment since I literally had no other choice!

    I have paid my loans every month, except once, for 18 months and the one month I did not they called me and my cosigner daily. They should be lucky I make a way to pay them at all as a lot of people don’t!

    I encourage any of you who have income to call this number and at least try. The worse they can do is tell you no.

    Reply

  4. As a Mom (& co-signor)of 3 sons … my name is on many Sallie Mae loans. Our problem is not with the interest rates, but with the way payments are posted. I have personally made payments with a coupon for the specific loans I was trying to bring current. It will be posted … a week later, that posting has been moved (or reversed) and it’s designated “delinquent” again. The balances and payments are constantly being moved around. Why would this be done? Aren’t they required to post a payment to the account specified like other account payables companies?

    Any thoughts are appreciated.

    Reply

  5. thanks for this information, I have been paying since 1995 at 9% at $300 per month and the principle is still $18,700.00. I have been through tough financial hardship and SM will not, is not the least bit helpful. I’ll get to work on getting my information together. Thanks again. Peter

    Reply

  6. 14 years of making the “minimum” payment and they wont even consider the notion of a settlment. I’ve paid this loan 3 times over and have been struggling with debt up untill 5 years ago.

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  7. I’m trying to pay off my loans while I’m back in school and in deferment. Would talking to the rates reduction department offer any assistance since I’m in deferment?

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  8. I came across your site in search of some options I might have for my student loan repayment. I’m more than sure you have been asked this question before, but for my sake I hope you don’t mind answering it again.

    I went to Full Sail in Winter Park FL. Between tuition and living expenses my loan climbed to $70000. I graduated in 2007 and have used I believe two forbearances and did pay 2 years of interest only (because the payments were lower – in hopes that I could change my financial situation before the interest only payments were over. Now, my wife and I gross $70000 a year until I get laid off within the next few months; (of course not in the field that I went to school for). Current payments go directly to principal (2 private loans together = 67000 & 3 federal together = 3000) totaling $850 a month. Its getting more difficult to “Rob peter to pay Paul.” To make things worse my mother cosigned the loan, but my parents are not in any position to help and I intend to handle this alone however it is getting exceedingly more difficult.

    I want to pay it all back – I am the one who borrowed it in the first place (to put myself into a better position in life), but $850 a month is killing me, However, I now just regret going to school at all.

    Any thoughts would be greatly appreciated……

    Reply

  9. This is my 2nd quarter using sallie loans Im paying my unsub loans so I wont have a big debt once im dne with school. Hope this helps!

    Reply

  10. I called the number above for the rate reduction and got an awesome lady. She extended my repayment from 15 to 30, and lowered my interest rate tremendously. Now my payment is lower and my principle balance is actually going DOWN.

    Reply

  11. This was really helpful! Thank you for the advice. SM did not offer me the option noted above on my first call, but I am not giving up.

    Also I have previously tried to apply for a forbearance online and it told me I did not qualify. However when I spoke with someone on the phone about my chronic medical condition they granted me the forbearance. This is allowing me time to sort out some medical bills before taking on larger SM payments.

    Best of luck to other fellow student debtors :)

    Reply

  12. I borrowed 40,000. With a 9.8 interest rate I now owe over 100,000. All because of the 70.000in interest!! They want a 1700.00 month payment. I told them over 6 months that I can not afford this payment and talked to over 38 people! They just told me oh too bad. I filed chpt 13 to be protected for a few years due to them and the day I filed I got a call from a nasty chick saying they would do 600 a month and yelled at me staring I shd of talked to a manager. Really. Now you call?? This company takes advantage of young adults who are trying to go to school and don’t realize the ramifications of such high interest rates.

    Reply

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