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Whether it's private or federal--there is no settling on education loans.
Expect it to be on your credit report for 10 years. Again, doesn't matter whether it's private or federal.
I think you are starting to have some good perspective in "handling" the loan--however, be prepared for Sallie Mae to say "no" to your request on a big payment. You will need to do a modification OR forebearance with them if it's private. You may be able to rehab it if its private. If it's public, they likely won't accept the $2k. Why? Because they want to see you go back to holding your end of the debt service agreement with them via a 9-month payment plan. They may accept the $2k if its private but that doesn't mean you are free and clear.
You already finished step 1: recognizing this is a debt you owe and needs paid. Step 2 is calling them and discussing the above.
I've never had a student loan so I don't have any personal data points, but I have heard a few horror stories on them from folks I know on Facebook. One person I know had her public loans charged off years ago (maybe 5?) and her grandparent who was on the loan somehow is now getting their social security docked for it. Another person I know also had a charged off loan decades ago and now they're retired and their social security is docked for it as well.
So just be aware that just because a loan chargeoff no longer reports on your credit report, there's a chance that you and/or any cosigners may end up having to pay for it years or decades later. The government has a long memory.
I'd address the loan immediately, but only once you get yourself in a position to make payments and never miss one. Many horror stories of folks who rehabbed payments and then stopped paying and that was it.
If you can't afford to make payments, you need to set a new budget ASAP and skip without nice things until you're at a point where you have at last a few months of payments in savings so you can set up a payment plan going forward and never miss it.
Good luck, keep us updated!
There is a huge difference in credit report exclusion provisions for federal and private student loans.
Additionally, federal student loans are exempt from the normal state SOL provisions regarding initiating civil action seeking a judgment.
There is also a difference in credit report exclusion provisions depending upon the type of federal student loan. Some federal student loans are exempt from all of the normal credit report exclusion dates and periods set forth in the FCRA.
Before determining either credit report exclusion provisions of reported derogs or any issue of expiration of SOL for bringing civil action, it is imperitive to know whether it is a federally insured or guaranteed student loan, and if so, the specific type and provisions under the Higher Education Act that apply to your type of loan.