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!)