90k in federal loans - how do I get a settlement?
My question is, is it a good idea to default, let my loan go to a collection agency and then negotiate a settlement amount with the collection agency? How much of a nightmare will this process be? And how much do you think they will settle for?
I have also contacted agencies that can represent me and negotiate a settlement with Sallie Mae. Their fee will be 10% of the forgiven balance. Does anyone have experience working with such an agency or are they usually scams? The one I contacted didn't sound all that bad - they told me up front that my credit will get affected and that the whole process will take up to 2 years.
easgrx
Sallie Mae will not even consider a settlement. They are guaranteed 100% of their claim...settling is not even a consideration.
It you default, depending on the guarantor, you will be charged 18-24% in collection fees. As a general rule, that is the max they will settle on...the collection fees. You are basically right back where you started from.
These settlement companies are feeding you a pile of BS. Sallie Mae just wont settle...that is the first indication they are are a scam. Most collection agencies and guarantors will not even work with so called settlement agencies. I use to have people tell me " work with the settlement company or get nothing.....they were sent right to guarnishment.
You cannot settle on the grounds that you do not have the earning potential. Would you try telling this to a mortgage company and want to keep the house? Student loans are no different....they aint going to buy that line...it has been heard before.
Your best option is to consolidate with the Direct Loan Program, go IBR or ICR and pay for 25 years...at the end of 25 years your remainning balance will be written off and charged back to you as taxable income. Or public service loan forgiveness.
