To put this into perspective, it is not just Sallie Mae that likely will not settle on a student loan. Student loans normally have a guarantor, so if you do not pay the full amount, then the guarantor makes up the balance. I am sure there is a clause that says Sallie Mae cannot do anything to "force" a payout from the guarantor. If they allow you to "settle" for an amount less than what you owe, then that is what would happen. They would be "forcing" a payment from the guarantor for the remaining balance.
Since student loans cannot be discharged in bankruptcy and they do not go away, there is no need for Sallie Mae, or any other bank that gives a student loan, to settle. My suggestion would be to take some of that money and put away 3-6 months into savings for an emergency fund. Then pay a bulk of it to the private loan (or any other loan) that you have which is the highest interest rate.
Now, when you send in the lump sum to pay the loan, make sure you call them and tell them to put all of that money to principal. Sometimes when you send in a lump sum of money, a company likes to "hold" your money by pushing your due date out many months into the future. You do not want this because then you will end up paying the same amount of interest as you would have normally because you won't have a payment due for many months.
Let us know how it goes.
Current Score: Eq: 823 Tu: 830
@Anonymous wrote:I would hope Sallie Mae would not negotiate a balance due (yours or mine.) Taxpayers dollars likely subsidized your loan while you were in college as my loans were. Anyone with money not only has the wherewithal to pay in full but a responsibility to pay as well.
To my knowledge, taxpayers dollars do not subsidize the interest on private loans. That is usually just federal loans.
