Let me preface this by saying this is not my loan, but a situation that a coworker told me about today. I told him I would post something about it here to see if anyone has had this situation come up.

He has a SL that he has been making payments on since he has been out of school. He has never missed a payment and was never late. The loan repayment was $40 per month. Apparently, the original loan was sold or transferred to Sallie Mae by the original SL creditor through no intervention of my friend.

The problem is, SM told him that they were changing the repayment terms and now he has to pay $120 per month instead of $40. It is possible that I could be a little off on the actual payment, but they are telling him he has to pay TRIPLE the original loan repayment agreement amount.

He cannot afford to send triple. He is now being reported as late on his CR, and SM calls him periodically trying to get him to pay more. He has explained the situation, and he has continued to pay the original amount monthly, so based on the original repayment agreement amount, he has yet to miss a payment but SM is calling him late as he is not paying their new payment amount.

Can they do this? What recourses does he have to 1) Get SM to acknowledge his original agreement so he can continue to pay his monthly amount, and 2) To get these lates of his CR. Thanks for the responses.

First of all, his loan was probably acquired during a merger between Sallie Mae and whoever holds his loan.

Second, $40 a month does not even meet the minimum required payment as set by federal guidelines. The minimum is actually $50 a month. How much was the original loan? How long has he been paying on it? When were the loans taken out?

Has he checked his credit report to be sure that the loan wasn't late prior to this?

With FFELP loans it is quite normal that a loan starts out at a bank or credit union and then is transfered to Sallie Mae to service. Also Sallie Mae has purchased several lenders in the past few years.

Payments going up or tripleing...is it possible that he has more than one loan?? A lot of students "hear" $50 payment when it is $50 (or whatever) PER loan.


Also is this a federally insured loan?? Sallie Mae does do private loans as well.

As I said, I could have been off on the amounts, could have been $50 original to $150 on what they are asking. He said his CR did not have any lates prior to this. The lates are recent. Regardless, they raised his amount triple to what was agreed.





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Don't know what exactly he has. He may be joining this board soon and posting his exact situation. This loan is several years old, and he had been paying his amount every month since he got out of school. The increase apparently only happened in the last several months when Sallie Mae aquired the loan then suddenly told him he had to pay more. All accounts of our conversation seemed to point that is was for 1 loan.

This is a total guess, but is it possible that he had a special agreement with the original loan holder for the $40/month and it's just not a repayment program that SM offers? Do you know the total amount still owed? As Quilty said, generally $50 is the absolute minimum payment, which makes me wonder if his original lender didn't have some sort of different income contingent program that was essentially made null and void after SM got it. SM doesn't have many "special" loan repayment plans; pretty much just the standard ones.

Is this a consolidation loan? If not, he might want to look into that. It wouldn't change his total amount due, but may give him some extended repayment options.

Hope this helps!