What to Do If Your Sallie Mae Student Loan is in Default
If you’ve missed numerous payments on your Sallie Mae loan and the loan is now in default, you’ll need to take steps to bring your overdue loan current. You can contact Sallie Mae directly by calling 1-866-913-6089 to discuss your repayment options and try to set up a more affordable payment plan.
Sallie Mae offers several options for those who can no longer afford their student loan payments and may be able to offer you terms that bring your monthly payment down. Just remember that extending the life of your loan and reducing monthly payments will end up costing you more in the long run.
When you miss one or more student loan payments, your loan will become delinquent. But if you don’t make your monthly student loan payments for 270 days, the loan goes into “default” status. At this point, the Federal government has the right to hold on to any federal tax refunds you are supposed to get, and can also garnish up to 15% of your net income. Whenever your loan falls into a default status, it will also be noted on your credit report and will reduce your credit score.
If you do end up having your wages garnished, you have the right to appeal the wage garnishment and request a hearing. You will need to fill out a “Request for Hearing” form about your wage garnishment and send it to the U.S. Department of Education Debt Collection Services Office (DCS) for review.
You have three options when your student loan becomes delinquent or is in default.
1. Contact the lender and negotiate repayment terms.
2. Consolidate your student loans to reduce the monthly payment and get a better interest rate.
3. Apply for a loan rehabilitation program.
Remember that you can only consolidate student loans that are no longer in default status, so you will need to find a way to make at least three consecutive monthly payments on time in order to bring your account back to a healthy state.
If you aren’t able to negotiate repayment terms with Sallie Mae and a student loan consolidation loan program doesn’t seem to be the best choice, consider the benefits of a rehabilitation program.
How Loan Rehabilitation Can Help a Sallie Mae Loan in Default
Loan rehabilitation programs are designed to fix your credit and have all negative information about your defaulted student loan removed from your credit files.
When you sign up for a loan rehabilitation program, you will be required to make between nine and 12 payments on time in an amount that you can afford and that has been agreed to by your lender or the Department of Education. This process helps to restore your credit and helps to bring your account up to date.
Q: I have student loans of $66,000, including $20 in penalties, fees and interest. My salary is $1,500 a month. My required student loan payments are is $415 a month. I want to get them out of default. Any advice?
A: I know those student loans seem overwhelming right now, especially given your modest salary. But there are some steps you can take to improve your situation.
Start by going through the process of rehabilitating your student loans to clear up your student loan default. Read this article which explains everything you need to know about fixing defaulted student loans.
Both of these items will give you great ideas about how to best tackle that student loan debt.