Reply
New Member
GoodGuy
Posts: 6
Registered: ‎06-08-2008
0

How Do I Negotiate With Sallie Mae - Your Advice + Experience Please!

I am looking for anyone who can share their advice and experience on negotiating partial loan forgiveness with Sallie Mae. Here briefly is my situation:

I am the co-signer on a $60K Sallie Mae student loan where the primary borrower has defaulted.

I want to negotiate a simple settlement with Sallie Mae (SLM): I am asking them to forgive some of the loan principal (20% or more), and in return I will pay off the rest in full. My goal is to reduce my loss, and end any loan liabilities with SLM.

It seems SLM cannot proactively work with me, they only have procedures in place for working with defaulted loans. I made the loan current with 2 payments, thinking this goodwill would make negotiation easier, but to no effect. The only advice I received from them was to let the loan go 120 days into default, then they will work with me. This sounds risky to me.

My question to everyone is: How do I best negotiate with Sallie Mae? What can I reasonably expect Sallie Mae to do for me? How would you advise I proceed? PLEASE SHARE YOUR ADVICE AND EXPERIENCES!

Thank you!

Moderator Emeritus
Timothy
Posts: 9,252
Registered: ‎03-19-2007
0

Re: How Do I Negotiate With Sallie Mae - Your Advice + Experience Please!

I have not had to deal with anything like this-
 
However- SM has no reason to work with you while the loan is current- 
Student loans have no SOL
The can do IRS intercepts w/o notice
They can do all kinds of thing most creditors must goto court to do.
 
My advice is to get a attorney-
 
Senior Contributor
Wonderin
Posts: 3,494
Registered: ‎05-25-2008
0

Re: How Do I Negotiate With Sallie Mae - Your Advice + Experience Please!

If this is a government backed loan, call the DoE ... I'm not sure how it would all work, but in the end, if it's a gov loan, they're the ones who've guaranteed it (therefore, you'd really be settling with them!).

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*

Hubby's FICOs when we started: high 400s (June 2008)
Hubby's FICO NOW (04/06/09): TU: 679 EQ: 608 EX: ???
My FICOs: TU: 643, EQ: 606
Closed on new home: 1/20/2009 -- If we can do it, YOU can do it!!

New Member
GoodGuy
Posts: 6
Registered: ‎06-08-2008
0

Re: How Do I Negotiate With Sallie Mae - Your Advice + Experience Please!

My understanding is that a loan will go into default after 270 days of missed payments, and that default is a situation to be avoided at all costs, since all bad things kick in, including collections agencies, wage garnishment, etc.
 
I have no intention to go into default. I just want to negotiate with SLM to lower the principal to a more manageable amount for me. This is exactly why I am posting my question... I would like to hear the experiences of other people who have faced this situation and found a way to avoid default by negotiating with SLM.
 
I have done all the research on what could happen at default, I have no intention of going there. I really need the advice of someone who has experienced a negotiation with SLM... how did you do it, and what was the outcome?
 
Regular Contributor
Wesley23
Posts: 122
Registered: ‎06-02-2008
0

Re: How Do I Negotiate With Sallie Mae - Your Advice + Experience Please!

[ Edited ]
Student loans is, unfortunately, one of the places I'm sort of an expert in. Unfortunately, you have nearly no bargaining power with SLM. Legislation has made even private school loans non-dischargeable. There is no incentive for SLM to negotiate with you at this point since they can just garnish your wages. And since, as someone above pointed out, there is no statute of limitations on schools loans (as per the above mentioned legislation), they can do this until you are dead or medically disabled.

SLM is kind of correct. The only way they are going to give you the time of day is if you are actually in default. Even then, your leverage is limited. Your only option is to either pay the debt or risk damaging your reputation with the CRAs by going into default. I highly suggest you also mail your congressmen/women about the scam of non-dischargeable private school loans. This subject has been getting more press attention lately in the NYT and WSJ.

Message Edited by Wesley23 on 06-15-2008 04:21 AM
Senior Contributor
MattH
Posts: 3,240
Registered: ‎04-03-2008
0

Re: How Do I Negotiate With Sallie Mae - Your Advice + Experience Please!



GoodGuy wrote:

I am looking for anyone who can share their advice and experience on negotiating partial loan forgiveness with Sallie Mae. Here briefly is my situation:

I am the co-signer on a $60K Sallie Mae student loan where the primary borrower has defaulted.

I want to negotiate a simple settlement with Sallie Mae (SLM): I am asking them to forgive some of the loan principal (20% or more), and in return I will pay off the rest in full. My goal is to reduce my loss, and end any loan liabilities with SLM.

It seems SLM cannot proactively work with me, they only have procedures in place for working with defaulted loans. I made the loan current with 2 payments, thinking this goodwill would make negotiation easier, but to no effect. The only advice I received from them was to let the loan go 120 days into default, then they will work with me. This sounds risky to me.

My question to everyone is: How do I best negotiate with Sallie Mae? What can I reasonably expect Sallie Mae to do for me? How would you advise I proceed? PLEASE SHARE YOUR ADVICE AND EXPERIENCES!

Thank you!






Unfortunately, I fear you are between the proverbial rock and hard place. Most creditors are willing to settle because they can choose between accepting a reduced amount or risking a much smaller amount imposed by a bankruptcy judge. But student loans have an extra-special legal status, they are almost as hard to escape as taxes, so the lender has very little incentive to be flexible. Your best option may be to hire a lawyer and sue the person who defaulted on the loan.
TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
If you dunno what tanstaafl means you must Google it
Frequent Contributor
LynnInMN
Posts: 465
Registered: ‎06-13-2008
0

Re: How Do I Negotiate With Sallie Mae - Your Advice + Experience Please!



Wonderin wrote:
If this is a government backed loan, call the DoE ... I'm not sure how it would all work, but in the end, if it's a gov loan, they're the ones who've guaranteed it (therefore, you'd really be settling with them!).


Calling the DOE wont help.  SM is a FFELP lender....they lend for FFELP state and regional guarantee agencies.  Any settlement would be with the guarantor, not the DOE. 
 
Federal or Private, SM wont settle, particularly if a loan is in good standing.  No such thing as good will, it just wont happen....there is no incentive for them to settle.  If it is a federal loan, the guarantor has guaranteed SM 100% of the funds.  If private, it could be owned by SM or it could be guaranteed by another agency and just serviced by SM.  If you have good credit and or assets, there is no way they will settle, even once it has defaulted.  As a cosignor, you are legally as responsible for the the debt as the borrower.  (Obviously there was a need for a cosignor in the beginning.)  Private loans do routinely file for judgments against both borrowers.  And as someone else has said, these are not dischargeble in BK.
Ex-Financial Aid Officer

Ex-Student Loan Collector
Frequent Contributor
LynnInMN
Posts: 465
Registered: ‎06-13-2008
0

Re: How Do I Negotiate With Sallie Mae - Your Advice + Experience Please!



Wesley23 wrote:
 I highly suggest you also mail your congressmen/women about the scam of non-dischargeable private school loans. This subject has been getting more press attention lately in the NYT and WSJ.

Message Edited by Wesley23 on 06-15-2008 04:21 AM


Why should private loans be dischargbeable in BK?  I am not a big fan of private loans but they do serve  a purpose...bridging the gap between federal aid and cost of attendance.  Without them, a lot of students wouldnt be able to finish or even go to school.  With the high rate of BK's nowadays, private loans would disappear if they became discharageable again. Big lenders are already pulling out of the program as it is. 
 
Education is the key to student loan management and borrowing.  When I was working financial aid, I saw tons of students borrowing money to live in dorms, even though they only lived 12 miles from campus.  The didnt want work study cause it would interfere with their social life.  After 4 years of studying history, they would graduate and whine that they couldnt get  a job.  They had loans all over the place and would have no clue how to find them either.  Yup, I got those calls too.
Ex-Financial Aid Officer

Ex-Student Loan Collector
Senior Contributor
MattH
Posts: 3,240
Registered: ‎04-03-2008
0

Re: How Do I Negotiate With Sallie Mae - Your Advice + Experience Please!

[ Edited ]

LynnInMN wrote:


Wesley23 wrote:
I highly suggest you also mail your congressmen/women about the scam of non-dischargeable private school loans. This subject has been getting more press attention lately in the NYT and WSJ.

Message Edited by Wesley23 on 06-15-2008 04:21 AM


Why should private loans be dischargbeable in BK? I am not a big fan of private loans but they do serve a purpose...bridging the gap between federal aid and cost of attendance. Without them, a lot of students wouldnt be able to finish or even go to school. With the high rate of BK's nowadays, private loans would disappear if they became discharageable again. Big lenders are already pulling out of the program as it is.
Education is the key to student loan management and borrowing. When I was working financial aid, I saw tons of students borrowing money to live in dorms, even though they only lived 12 miles from campus. The didnt want work study cause it would interfere with their social life. After 4 years of studying history, they would graduate and whine that they couldnt get a job. They had loans all over the place and would have no clue how to find them either. Yup, I got those calls too.





Maybe there should be a required two-day seminar on personal finance, employment, debt management, etcetera as a condition of getting any student loan (call it "Real World 101")). Such a seminar might be even more effective if each institution whose students were getting Federally subsidized loans were required to present detailed numbers on rates of graduation and employment for their own students, broken down by program or major, since it can make a big difference what they study and where they study it!

Message Edited by MattH on 06-21-2008 06:41 AM
TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
If you dunno what tanstaafl means you must Google it
Regular Contributor
Wesley23
Posts: 122
Registered: ‎06-02-2008
0

Re: How Do I Negotiate With Sallie Mae - Your Advice + Experience Please!



LynnInMN wrote:


Wesley23 wrote:
 I highly suggest you also mail your congressmen/women about the scam of non-dischargeable private school loans. This subject has been getting more press attention lately in the NYT and WSJ.

Message Edited by Wesley23 on 06-15-2008 04:21 AM


Why should private loans be dischargbeable in BK?  I am not a big fan of private loans but they do serve  a purpose...bridging the gap between federal aid and cost of attendance.  Without them, a lot of students wouldnt be able to finish or even go to school.  With the high rate of BK's nowadays, private loans would disappear if they became discharageable again. Big lenders are already pulling out of the program as it is. 
 
Education is the key to student loan management and borrowing.  When I was working financial aid, I saw tons of students borrowing money to live in dorms, even though they only lived 12 miles from campus.  The didnt want work study cause it would interfere with their social life.  After 4 years of studying history, they would graduate and whine that they couldnt get  a job.  They had loans all over the place and would have no clue how to find them either.  Yup, I got those calls too.





I have nothing against making federally backed Stafford/Plus loans non-dischargeable in BK. Those do serve a purpose; they are low interest loans that help people get through school. With careful planning, one should be able to get through college solely on federally backed loans. Besides, the tax payers are footing some of the bill on these loans, so it's only fair that we get our money back from the debtors.

Private loans, on the other hand, should be dischargeable in BK. Non-dischageable (private) school loans are very unique in the lending industry. In fact, it's the only example of the government making a private loan non-dischargeable that I can find. Every other private loan made is based solely on risk and is therefore dischargeable in BK. Some people make the argument that since there is no tangible asset to repossess in the event of default, the entire loan should be non-dischargeable in order to mitigate risk. This is a fallacious argument since lots of loans the lending industry makes are not based on tangible assets. A salient example of this is loans based on derivatives.

The only reason that private education loans have been made non-dischargeable is because there has been an intense lobbying effort by Sallie Mae and their ilk to keep these non-dischargeable. It is extremely profitable for these companies. These loans are quite literally risk free, and Sallie Mae is free to charge a relatively high interest rate on these loans.

The fact that these private non-dischargeable loans exist points to a much larger problem-- the government is not doing enough to help people through college. The solution isn't to make Sallie Mae richer by making their debtors indentured servants to the corporation via legislation. The solution is to make Staffords and PLUS loans easier to get.

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}