11 Steps to Relief From Federal Student Loans

Students and parents can negotiate lower debts, smaller payments, or temporary reprieves

May 10, 2010 RSS Feed Print

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9. Propose a reasonable solution. Generally, delinquent borrowers can switch to more affordable payment plans or win deferments without having to make any payments first. The government can also award retroactive forbearances or deferments to wipe away current delinquencies, though collectors may ask for evidence of a good reason, such as unemployment. The federal government allows its collectors to waive collection costs and knock as much as 10 percent off of the total debt for those who prove that's all they can afford and who make good faith efforts at repayment. Such discounts are left to the discretion of the servicer or collector, however.

[Read more tips from the collections manual]

10. Try to fix your record while you wait for a final agreement. Lenders typically urge borrowers to keep making payments during negotiations. But borrowers who can't make payments can ask for retroactive deferment or forbearance.

11. Get help. If you're having trouble with your collection agency or servicer, call the Department of Education's ombudsman. If you need outside advice, contact the National Consumer Law Center or your local legal aid office.

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Tags:: bankruptcy,; financial aid,; student loans

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In my experience, Sallie Mae sets up students TO fail by stating they are not qualified to have anything but the standard repayment rate UNLIKE the Feds, which give you at least five options to adjust to according your current circumstances and the Fed will work with you, Sallie Mae will not.

psych of AZ 2:01PM September 15, 2012

In my opinion, the schools and students are more to blame that the lenders. Everyone complains that they can't afford to pay back their student loans, but take a new loan year after year never giving a thought to how they will pay the loan back after school. A student loan isn't a grant, it a LOAN! Getting a degree should be viewed as an investment. When you calculate the future increase in earnings with and without a degree, most times it's a negative return and makes no sense to get the degree. Most university degrees are a collosal waste of money. Most would be better off in a vocational program or with no degree at all unless you pursue an advanced degree AND plan to use it.

Dave C. of UT 5:31PM August 29, 2012

We are not trying to be un responsible and not pay what we owe, or trying to get out of it, but the gov. needs to be fiar to every body not just the big companies that he gave money to and they just spent it soooooo unwisely. Why cant we get that kind of help?? Come on these are people that are trying to better them selfs and the future of the country, Please help us!!!

Diana.G. of TX 12:06AM May 09, 2012