Those who borrowed from Sallie Mae after this 2014 split have private student loans, which aren't eligible for federal forgiveness programs. However, Sallie Mae will discharge debts for borrowers who die or become totally and permanently disabled.
If you're experiencing financial hardship, you could contact Sallie Mae to see if it would be willing to forbear or reduce your payments temporarily. However, this is only a short-term fix. Generally, the only way to permanently reduce your loan payment is to refinance your loan.
Private student loans are available to undergraduate and graduate students from financial institutions like Sallie Mae®. They're designed to fill the funding gap when savings, scholarships, and federal student aid aren't enough.
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.
If you are delinquent on your student loan payment for 90 days or more, your loan servicer will report the delinquency to the national credit bureaus, which can negatively impact your credit rating. If you continue to be delinquent, you risk your loan going into default.
Thus, if you ever had a Sallie Mae loan or had Sallie Mae conduct loan servicing, that loan and servicing, likely, was transferred to Navient. Further, Navient then changed its name in 2021 to Aidvantage. See here.
Private student loans are usually only forgiven when the borrower becomes permanently disabled or dies—sometimes not even then. While there are several options for federal student loan cancellation and forgiveness, private programs for cancellation are less common.
Private loans, on the other hand, are often easier to deal with in bankruptcy. For instance, private lenders like Sallie Mae might be more willing to settle or negotiate since they don't have the same protections as federal loans.
After a referral from the CFPB, in 2014, the Department of Justice and the Federal Deposit Insurance Corporation ordered Navient and its predecessor, Sallie Mae, to pay almost $100 million for illegally overcharging nearly 78,000 servicemembers.
With some planning and availability of cash resources, and once the garnishment is removed, or no longer applied due to job loss or job transition, settling a Sallie Mae student loan is possible.
Loss of benefits – You'll lose eligibility for deferment, forbearance, interest-only student loan repayment options, interest-rate reduction programs, and cosigner release. Legal action: Sallie Mae or a collection agency may sue you and your cosigner to recover the debt.
What student loans are not eligible for forgiveness? Private student loans, by definition, are private and are not eligible to be forgiven. These are loans the borrower owes to student loan providers and not the federal government.
Deferring payments lets you reduce or postpone your payments. When you request a deferment of a Sallie Mae undergraduate student loan, you won't have to make principal and interest payments while you're in school or during your internship, law clerkship, fellowship, or residency.
On-campus room and board: These include your dorm expenses and any meal plan you purchase; the school will automatically deduct these from your loan if you've signed up for them. Off-campus housing: If you live off-campus, these eligible expenses can include rent, utilities, and groceries.
Sallie Mae is not a federal loan servicer.
When Sallie Mae first formed, it was a government-sponsored enterprise servicing federal student loans — or loans made by the government. But in 2014, it split into two separate companies.
No, there is no way to change private student loans to federal loans. However, you can refinance your private and federal loans together, ideally to qualify for a lower rate or better loan terms.
To get rid of them, you'll need to pay off the balance in full or qualify for a loan forgiveness option like Public Service Loan Forgiveness or Total and Permanent Disability Discharge. Read more about how to get a copy of a student loan promissory note. Learn More: Do Student Loans Go Away After 20 Years?
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.
Sallie Mae stopped originating federal student loans in 2010. Today, we exclusively offer private student loans. Even before we offer a private student loan, we help student and families build an effective and responsible plan to pay for college with a three-step approach.
Both federal and private student loans fall off your credit report about seven years after your last payment or date of default. You default after nine months of nonpayment for federal student loans, and you're not in deferment or forbearance.
The Benefits of Fresh Start for Eligible Loans
Restores eligibility to receive federal student aid including Federal Pell Grants and work-study. Protects borrowers from wage garnishments and costly collection fees. Restores eligibility for future loan rehabilitation for borrowers who rehabilitated during the pause.
Private student loans don't go away unless you pay them off, but in most cases, they'll fall off your credit report after seven years. But keep in mind that lenders can still contact you to collect an old debt, even if it's decades old and they can no longer take you to court over it.