Settle student loans for less (no lates)

[scvbd99]

If these are federal student loans, it's 100% out of the lenders' hands about whether or not they'd prefer your settlement terms. 

They have very strict federal guidlines they have to adhere to. 

So the best bet would be to find out exactly which government agency regulates your federal student loans, and ask them if there's anything written in law about settling federal student loans outside of default. I"m betting there's not, but I don't know. 

For private loans, I have no idea. 

[Anonymous]

There's nothing in the law about settling in default or out of default. I just don't see why settling for more than the amount loaned is an issue.

[scvbd99]

If it benefits the lender (and if the Dept of Ed/CFPB allows it), they'd do your deal.

I'm curious about this. You going to try it?

[Anonymous]

I mean I would say it benefits them because what if later in life I can't repay and go into default then they have to settle for pennies on the dollar? That's a risk.

It's only a 2k discount on interest that's accrued they would still be making 5k profit in the end anyways.

Is like to try it. If the money comes through I will. It's just they have NO collateral like a car loan or home loan do so they have no real thing to forclose or repo. Additionally I own my own business so they can't exactly garnish my wages because I don't get a paycheck per se. They're ONLY leverage is holding my credit score hostage, which if it means paying 5k instead of 35k is a big incentive for me to not pay, that's $30,000 profit.

All this to say, 35k now seems like a much better deal than waiting 5-10-15 years to hope to collect more.

[scvbd99]

If you've never had lates, they probably deem you pretty low risk. 

They're in a position to make well over a thousand in interst off you every year unless you pay down a lot of the principal in a lump sum. That would look pretty attractive to them over as you said 5, 10, 15 years.

I can't imagine they'd do it, but again, are you going to give it a try?  Let us know if you do. 

[Anonymous]

Well being in forbearance is a slippery slope to default

If the money comes through I will definitely make the offer.