I am sure the story has been told time and time again but long story short - I went to college and joined the army. Racked up $11,000 in private loans from Sally Mae and $2500 in Federal from Direct Loans. Got injured in Basic Training and had the option of going home (to finish college was on delayed enlistment) or stay. I went home and was under the assumption that since I was discharged medically that my VA benefits would kick in it didnt.

So here I am, 3 years later and 4 bad jobs and a bankruptcy later, with Sallie Mae and Direct Loans breathing down my neck. But the light at the end of the tunnel came and I can now afford to pay these debtors here is my problem.

SallieMae tacked on $3,900 in collections and interest bringing my grand total to $15,005.95.
DirectLoans is ok only owe $2,400 and plan to pay them off within 6 mo.

I WANT to start paying SallieMae back but I dont know how. I am honestly afraid to put my banking information into the site and attempt to start paying them back at the normal rate of $71.00 a mo in fear they will try to deduct the back-owed $4,000 from me immediately since they say that is my "next due payment." I am also under the assumption that I cant consolidate currently sallie has me for 7.5 percent. What should I do? Is there anything I can do to get myself back on track and get these people paid off? I never intended for this to happen but I guess nobody really does. Any help would be appreciated.

I'm no expert on private/signature student loans, but my understanding is that there are fewer options than with federal loans. My understanding is that no, you can not consolidate them. You might be able to find another lender to buy them but they can't be consolidated with the Direct Loans. Also, I don't know that the interest rate would improve by going to another lender.

I know with Federal loans there is some type of "rehabilitation" program whereby sticking to a repayment schedule you can "rehab" the loan. I would suggest you call Sallie Mae and find out if they have a similar program for the private loans.

Good luck.

If you call Sallie Mae, use this number, 888.545.4199 x 6554 Kristen Spencer is a contact. This number is for their legal department. You will get correct answers -- unlike Sallie's regular number which will get you information that varies from csr to csr, not to mention being on hold for decades.

Good luck,

~Chase

Thanks for the help. Like I said, I want to start paying this back but I am afraid they are gonna try and take $3900 out of my checking account and that just cant happen.

I think I am just going to manually go in each month and make individual payments until I get that balance down instead of risking it. Thanks for the help everyone.

If you make the $71 a month payment and you have a past due balance of $4k, they are going to come after you for the whole bit. You need to work out a payment plan with them and rehab these loans. BEFORE they start garnishment proceedings.

He cant rehab as these are private loans, but you are right that he cant just start paying $71/month and expect everything to stay hunky dory. My advise would be if you Direct Loans are in a ok status, concentrate on getting these private loans taken care of. The private loan is also likely to be at a higher interest rate and they will sue you if you get too far behind in your default.

Ahh didn't catch that these are private loans.

Yeah, the OP better do something pretty fast ... or else he'll REALLY think he's in a bind!

What do they expect me to do pay $4,000 at once? Who has that kind of cash laying around - not me. They can only garnish 10% of my expendable income and the amount I plan to pay each month $200 is more than that.

Yes, actually, that is exactly what they expect you to do. You need to call them and make arrangements.

Private loans are not bound by the 10% garnishment rule as in federal loans. They have to take out a judgement first and then I believe they can garnish 25%.

The point is you have to set up acceptable arrangements with them.

What if they say no. I mean, are they going to give me acceptable arrangements?

We can't answer that question, but I suspect that they're going to give you a hard time to begin with; you are behind on the loan by $4k and they want their money. But wouldn't it be better to try to work this out with them voluntarily rather than them getting a judgment and being able to garnish up to 25% of your pay?

We are not fortune tellers, but just making payments without setting up arrangements is fruitless. Call them and talk to them. Be open and honest. Is there any possibiltiy of you picking up a part time job to help pay this down??

Agree! Calling, being open and honest are of paramount importance - not only for your future well being, but it will help your stress level MUCH more than if you didn't call.
If I remember correctly, I read somewhere (not on this board) that a person's Social Security benefits were garnished!

~Chase

These are private loans thru Sallie Mae. Social Security cannot be touch.

OIC - thank you for clarifying this.

~Chase

Not sure if anyone has mentioned this in this thread, but I have researched private loan consolidation a bit and right now, the best rates are at 8% or above. I realize that this doesn't help the OP much, but I thought it might add some peace of mind. I have about $40K in private loans at variable interest rates with Citi (whom I hate, might I add...SM is paid off thanks to a lot of part time hours and teaching summer school, but they were only $10K), so I would consolidate for the long-term, but the interest rate is just not appealing. Besides, I would like to PIF in the next two years if possible (goal for this year is DH's truck...$26900 more to go).

Sorry, I got OT there.

Kris

Well, I am going to call tomorrow and hopefully they will agree to setup payment arrangements. A part-time job is out of the question as I am already working 50+ hours 6 days a week. I wanna get this paid off, but I am not going to kill myself doing it. I will post results tomorrow - thanks for everyones help.