Question about Sallie Mae Default
Posted by Plumrose15153@reddit | studentloandefaulters | View on Reddit | 14 comments
Quick question, is a default and a charge off the same thing?
Also, I spoke to someone and was advised to keep paying what little I can to Sallie Mae so that in the case that I was subpoena’d that there was proof I was trying to make payments to the loans. They’re asking for 2500 a month but they told me if I make like 100 per month and they try to sue then there would be a paper trail that I was trying to pay still.
However, I also read that what little payment I make will open up the statute of limitation and if I’m trying to go for the time bar of 4 years in California that I shouldn’t make payments or even acknowledge that the loan is mine.
Because the thing is I didn’t finish the degree or get the license I took the loan out for due to mishandling of my nursing school. (& I tried so hard to finish the program but they won’t let me).
Any help please? & thank you in advance!!!
Temporary_Record_374@reddit
Hello. I came here to seek advice. I have over 100k in salie mae loans. I am wondering if it is worth to keep paying? My outlook and happiness for life has drastically changed the last year.
I barely make 70k a year. I rent an apartment and drive a car. Credit score is around 650. What would you recommend I do? I am finding life unbearable and difficult with making payments the last 8 years of my life, and the loans just seem insurmountable.
Plumrose15153@reddit (OP)
100k is a lot. If you want to be strategic, I would let it charge off and go to collections so you can pay a lump sum for a fraction of what you owe. The downside is your credit score will be impacted. That’s what I’d do ideally. However, if you have no money at all I would have no assets, let it charge off and just wait for a judgement but be prepared to explain to the judge how your current living situation doesn’t allow you to pay Sallie Mae without it negatively impacting your ability to pay your necessities. Also depending on your statute of limitation if you don’t get a judgement or sued then you’re good to go.
Emotional_Guess_4506@reddit
Thank you-does it work if I’m a co-signer to my son’s school loans?
Plumrose15153@reddit (OP)
Try not to have assets in case of judgement. & have proof paying the loan will negatively impact your cost of living. Also you could charge off the loans and settle it for Pennies instead with the debt collector. Another option is wait for the statute of limitation to pass. Good luck to you and your son dear.
--Cr1imsoN--@reddit
I am not a lawyer or financial expert but I will try to explain as best as I can from personal experience. First some context, I strategically defaulted on about $100,000 in a Sallie Mae private student loan after attempting to pay it down for 2 years and only seeing the balance increase (I.e. revolving debt). This was back in 2018 and in the state of Pennsylvania.
As for your question regarding default vs charge off. First you have delinquency which basically means you missed a single payment or it was late. Default is the act of missing multiple payments in a row. When a loan goes into default is when it is reported to the credit agencies and you will see your credit score affected. In addition, the servicer (Sallie Mae) will increase their attempts to collect from you. Expect lots of phone calls. They may be willing to negotiate (I.e. payment plan) to avoid the debt going past the statute of limitations. A charge off is the final stage when the servicer (again Sallie Mae in this case) essentially considers the debt to be at loss and uncollectable after repeated attempts. They may still attempt to collect or sell the debt to a collection agency.
You are correct that making any sort of payment (or acknowledgment) will renew the clock on the statute of limitations if you are seeking to go past the time on this to be ineligible to be sued on the debt.
As stated, Sallie Mae wants you to make a payment. Any payment, to keep you on the hook and to prevent you from going past the statute of limitations. If you’re seeking to go past the statute of limitations then you shouldn’t give them a dime. You should also look to remain judgement proof for the 4 year duration before the statute of limitations kicks in. For me, that meant not really having any assets. I didn’t need to worry about wage garnishment as Pennsylvania forbids wage garnishment on private student loans. Im not sure if California permits wage garnishment on private student loans. Even so, wage garnishment isn’t terribly common from what I’ve observed among major banks such as Sallie Mae as the cost usually outweighs the benefits as Sallie Mae is required to take the creditor to court, actually win and then receive a judgement. If you’re a frequent job hopper then it becomes even more difficult to enforce and it’s often not worth the effort. Much easier to pay a few minimum wage workers to harass you with phone calls to pay up.
Also don’t settle. Unless it’s something you can afford. When I defaulted, they basically wanted around $60k as a settlement. I wasn’t even making that in a year… still don’t tbh. As stated, I defaulted back in 2018. Credit score took a dive. Got real used to blocking Sallie Mae collection calls. Eventually was charged off and sold to a collections agency. They did the same thing (phone calls and letters). Ignored them as well unless it was anything with a court date. Never was sued for the debt. Well past the statute of limitations now. Credit is around 736–750. No regrets, well other than being suckered into the college scheme, but that’s another subject.
I hope this helps!
Plumrose15153@reddit (OP)
Wow you are so lucky! That’s so amazing, I’m so happy for you! Thank you so much for responding! I appreciate you!
--Cr1imsoN--@reddit
No problem! Feel free to reach out if you have any other questions!
Plumrose15153@reddit (OP)
Hi just wondering, I have 2 other student loans from Sallie Mae and they’re really low loans so my plan is to pay those 2 but for the other 2 that is 160k I cannot pay. If I pay the 2 loans with the low amount, will that open up the statute of limitation for the other 2 loans that are discharging?
--Cr1imsoN--@reddit
That's a good question. I'm honestly not too sure, but the statute of limitations time period starts from the first missed payment. I'm assuming the loans aren't consolidated. Therefore, I think if you stopped paying on the 160k value, but pay the others, then you'd likely be fine. You might need to ask a debt lawyer or you can try asking about this question as a new topic in the sub and see what other people say. My loans were broken up into 7 different loans that totaled in 100k. So I just stopped paying all of them. They were a single monthly payment though, but technically each one was a different loan.
snaigy@reddit
How bad did your credit get hit?
--Cr1imsoN--@reddit
Good question! It's been so long I had to check the reports, but they only went back as far as 2020 and I had defaulted in 2018. I want to say that my credit score dropped to around 580. The loans I had through Sallie Mae were like 7 different loans non-consolidated, but totalled close to $100,000. So I think each loan basically dinged my credit score when they were reported. The oldest report in October 2020 showed my score at 647 with the collections showing on the report. So even by 2 years, my credit was already seeing an improvement. This was my Transunion report. Equifax was 688 in 2020 (I don't think the collections was reported to Equifax though). Now 6 years later, my Transunion is at 736 and Equifax at 742.
I should add that my credit was around 670-680 for both credit bureaus before the default. So it definitely took a major hit, but it wasn't as bad as I thought it would be. I basically planned to have a low credit score for 7 years, but after 2 years I was already seeing a major improvement.
juicyfizz@reddit
Did they resort to calling your friends and family when you stopped paying? I have private loans from Navient (formerly it was with Sallie Mae) and when I was unable to pay and just stopped (this was like 8 or 9 years ago) they started calling people in my family and my friends. I have no fucking idea how they got their numbers but it was fucking humiliating.
--Cr1imsoN--@reddit
Oh yeah! They definitely did, but I warned my family beforehand. They didn't call any friends though. Just immediate family.
DisembarkEmbargo@reddit
u/Cr1msonN have you a lot of good information. I wanted to add in my experience. I wanted to add in my experience. I recently settled after a charge-off (settled oct 2023).
With Sallie Mae your charged off loans will go to their recovery department which is like internal collections so a collection account may not show on your credit report but a charge-off remark will show.
If you have money and you need to impress employers, landlords, or bank within the next 7 years (when negative remarks drop from credit report) you could negotiate a settlement.
However, if your credit can wait out the SOL (4 years) and then additional 3? Years because of the drop-off then you should. Try to remain judgement proof during that time.