Debt Mindset Series: It's Time to Say Goodbye to Sallie Mae - My Debt Epiphany (2024)

FAQs

Is Sallie Mae forgiving student loans? ›

While newer Sallie Mae loans don't qualify for forgiveness, you may have other options. Find out if one of these strategies can help you better manage your debt.

For these reasons, most people won't be able to get their Sallie Mae loan forgiven and will need to fully repay it. If you're having trouble paying your loan, you'll need to figure out another option, such as refinancing it or asking Sallie Mae about a temporary loan forbearance.

While operating as Sallie Mae, Navient made predatory subprime loans to students attending for-profit schools and colleges with low graduation rates even though it knew that borrowers would be unable to repay the loans.

If your payments aren't up to date, your account can go into default. At that point, you have to pay the entire amount owed, plus fees. The servicer or loan lender can send your account to collection. For federal loans, the servicer also has the right to take the balance of your payments from your wages.

For example, as reported here, Navient has just settled a massive consolidated case filed against it by several debtors and 39 state governments. The consolidated case alleged that Sallie Mae engaged in predatory lending practices by making loans to students who would not be able to pay off the loans.

A False Claims suit was filed against Sallie Mae by former U.S. Department of Education researcher, Dr. Oberg, in 2009. The suit alleges that Sallie Mae and other lenders deliberately overcharged the U.S. government. The findings by Oberg were labeled among higher education policy analysts as the 9.5 scandal.

Student loan debt relief companies or law firms do not have the ability to negotiate with Sallie Mae for a “special deal.” They may advise you to stop making loan payments to your student loan servicer, which may result in delinquency, default, or your credit history being negatively impacted.

If you took out Sallie Mae loans to pay for college, you can — and probably should — refinance with another lender if it will save you money. Though borrowers can't refinance loans directly with Sallie Mae, there are several other lenders that will allow you to prequalify without affecting your credit score.

Once your student loan is in default, the entire Current Balance becomes due, not just the missed monthly payments. Your default may be reported to the consumer reporting agencies, where it can stay on your credit report for up to seven years.

Navient Corporation is an American student loan servicer based in Wilmington, Delaware. Managing nearly $300 billion in student loans for more than 12 million debtors, the company was formed in 2014 by the split of Sallie Mae into two distinct entities: Sallie Mae Bank and Navient.

What company took over Sallie Mae loans? ›

Navient was created in 2014, when the company then known as Sallie Mae (formally, SLM Corporation), separated its loan servicing and recovery business from its consumer banking business.

Our Verdict. Sallie Mae is one of the largest private student loan providers with several perks and features. A co-signer release is available after 12 full, on-time payments—which is ideal for borrowers needing temporary assistance. International and part-time students are also eligible for Sallie Mae loans.

Lender Sallie Mae used to offer federal student loans, and if you received one, you may be able to qualify for loan forgiveness. But federal student loan forgiveness can be hard to get — and if you have a private student loan through Sallie Mae, federal forgiveness is not available.

At Sallie Mae, enrolling in auto debit may qualify you for a 0.25 percentage point interest rate deduction on your eligible loan(s). By lowering your interest rate and making on-time payments each month, you will save money on your total loan cost, which could in result in your paying off your student loans faster.

Lenders will report the delinquency to the credit bureaus, which means your credit score will take a hit. Lenders could also sell the debt to a collection agency that decides to sue you in court. You'll also have a harder time getting approved for future credit products with favorable terms.

All Sallie Mae loans taken out since 2014 are private. The best way to determine if you have federal or private student loans is to check studentaid.gov. If you need to borrow money for college, exhaust federal student loans before taking out a private student loan.

Cons Explained

No refinancing option available: Certain lenders offer student loan refinancing, but Sallie Mae does not. Limited repayment terms: Sallie Mae only offers repayment terms of 120 to 180 months.

Navient loans can be forgiven after 20 years if they are federal student loans repaid under an IDR plan. The forgiveness applies to loans received for undergraduate study, while loans for graduate or professional study or Parent PLUS Loans may be forgiven after 25 years.