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How Does Student Loans Debt Settlement Work?

What is Debt Settlement?

Debt settlement or debt negotiation is type of service which is intended to help relief from unsecured loans debt or credit card debt by reducing the total amount of unsecured debt. Usually, outstanding debt can be reduced 40-60% of the original balance. Debt settlement is an alternative to bankruptcy.  When you find out that you are unable to meet your financial obligations and you are persistently falling behind your monthly payments, it is time to try to negotiate a debt settlement. In a debt settlement negotiation agreement, lenders agree to accept a payment that is less than total balance of the debt but it’s considered payment in total. The total amount includes all the fees and interest. The debt than will be erased. This can be done via one lump sum payment or interest-free monthly payments. You can contact creditors yourself or you can hire professional negotiators to do a debt settlement work on your behalf. To decide if the debt settlement is the best option for you, you should consider your budget and obligations and deliberate your ability to access money before you decide what monthly payments you can afford to make.

Student Loan Debt Negotiation

Student loan debt settlement is a balance negotiation on your defaulted student loan debt. If your student loan is in default it means that you have missed to make your loan payments for period of time; default usually comes after 270 days of failure to repay your federal student loans. Settlement agreement will become formal after the US Department of Education and the collection agencies accept it.

How to Pay?

To negotiate your defaulted student loan debts settlement, you must be able to make a lump sum payment to bay back most of the loan balance. The Department of Education will entail you to bay back the full sum of the settlement amount within a fiscal year. Such a compromise settlement offer will typically require you to pay the settlement amount in total within 90 days of the date the settlement offer was made. Rarely, the Department of Education allows borrower to pay back the part of the settlement amount through monthly payments, but these payments will generally be paid within one fiscal year.

The Debt Settlement Amount

Department of Education will probably accept a reduced payment for the complete satisfaction of your outstanding student loan balance. The intention of the settlement is to offer students that have defaulted loans a solution to satisfy their outstanding student loan balance.  If you are not able to satisfy the loan balance completely, the collection agency or the Department of Education should be willing to offer this student loan settlement. It is unlikely that the Department of Education is going to offer student loan debts settlement that is less than the current recovery rate. The recovery rate is the percentage of disbursements on defaulted student loans that are recovered and includes interest and penalties in addition to the payments to the principal balance.

Types of Settlement

In some cases, the US Department of Education allows private collection agencies to make student loan debt settlements without previous Department’s approval. To get allowed your debt settlement you must agree to one of the three typical types of settlement:

  • The first settlement type satisfies only the principal and accrued owing interest.
  • Second settlement type satisfies the principal amount plus 50% of the accrued but unpaid interest.
  • The third type of settlement satisfies 90% of the current principal and interest balance.

If you offer less than these usual compromises, the collection agency will need to get approval for debt settlement from the Department of Education.

Debt Settlement Pros and Cons

The positive side of student loan debt settlement may include some of the following:

  • You will pay back amount that is the same as the original student loan amount you have borrowed;
  • You’ll be free of the stress that accompanies this uncomfortable financial situation;
  • You will be able to receive additional Federal financial aid for students;
  • Administrative wage garnishment will end and your tax return and other benefits wouldn’t longer be seized.

However, student loan debt settlement has some downsides and here are some of them:

  • You should go for the debt settlement only if you already have a poor credit history. If not, your credit score will be damaged for a period of time;
  • Another negative aspect of student loan debt settlement is that while you are paying the settlement company, most of them won’t inform you how much exactly of your monthly payments is going to your debts and how much is actually being deduced as their fee.

Ensure that you get all the terms of student loan debt agreement in writing and make sure that you understand what you are signing and what the company is willing to do to settle your loan debt.

How to Qualify for Student Loan Debt Settlement?

  • Debt negotiation is available on FFEL loans, Direct student loans, Federal Perkins loans and Pell grants of any balance.
  • You must satisfy the payment within the approved time frame, which is 90 days from settlement approval 9 (in exceptional cases this time frame can be extended).
  • Student loan debt settlements should be paid by a certified method of payment such as money orders, credit cards or cashier’s check.
  • Make sure to write a good debt settlement letter – this will help you negotiate your debts.

Debt Consolidation Student Loans

If you have a several student loan debts you may opt to consolidate your debts which means that you can take out a loan to repay other debts. This allows you to consolidate the money you owe into only one payment.

Debt Settlement in Canada

In Canada, it is possibly to negotiate lump sum settlements on unsecured consumer debt such as credit cards, personal loans, lines of credit, and utilities (telephone bills, cable, Internet, and cell phone).

Debt settlement might be right option for you if you meet the following conditions:

  • If you are solvent;
  • If you have income or the other way to access to money;
  • If you have more than $10,000 in unsecured debt.

In case you are insolvent, which means that you cannot pay your bills when they are due, only available options are a consumer proposal and personal bankruptcy. However, if you have provincial student loan debt you might be able to negotiate a settlement on it. You can negotiate with the original student loan lender such as Canada Student Loans to pay a cash lump sum that is identical to a large portion of your defaulted loan balance.

Provincial governments in Canada have their own programs to help borrowers make their provincial student loans repayment more convenient, such as revision of repayment terms, interest relief, debt reduction in repayment and the Repayment Assistance Program (RAP) offered by Canadian government.

Other available options you should consider if you have difficulty paying back your student loans are different flexible student loan repayment options and a student loan forgiveness program offered by the federal government planned to help a selected group of college graduates to pay back their student loans.

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How to Appeal a Student Loan Denial from Sallie Mae – The Essential Information

Educational expenses have been rising considerably over last decade and for a large number of students nowadays the only possible way to acquire higher education is to take a student loan or some other type of financial aid. Lots of students realize one or more federal or private student loans in order to pay for their college or university education. These loans are based on credit history, income, tuition fees and student’s needs and millions of students in US today are granted such educational financial aid. However, it happens sometimes that applicants receive a denial notification on their loan application based on criteria such as bad credit history or employment status.

Sallie Mae is one of the US largest private student loan lenders operating since 1972.  It is one of the leading America’s education loan lenders due to its low interest rates, advanced repayment options and numerous loan alternatives. And very important fact for those unlucky ones who have been denied their student loan, Sallie Mae has an appeal process option. That means that applicants who have been denied, but who believe that their loan has been rejected because of credit reporting errors or in the event that certain mitigating conditions apply, may appeal their student loan denial.

Here is some useful information to help you go through the appeal process.

First to be considered are some facilitating circumstances of student’s denied loan application as follows:

  • Temporary job loss
  • Medical emergencies
  • Temporary credit aggravation due to divorce
  • Disputed credit record based on a billing error
  • Natural disasters like earthquakes, tornadoes, hurricanes, tsunamis, etc.

In case you require appeal on student loan denial with Sallie Mae, keep in mind that you are going to be required to submit adequate third-party documentation as a verification of the events that caused your bad credit history.

If your Sallie Mae education loan is denied and you believe that you have good reasons to overturn that decision, you should without delay request appeal on your student loan denial. With the intention of helping you in this process, here is the list of succeeding steps that you should take:

  1. First you should do is to contact Sallie Mae via phone at (800) 695 3317. All applicants are invited to appeal via this phone number, because there is no appeal form to fill out available.
  2. Talk with the representative and present him/her your reasons for appealing. If they find it a reasonable explanation, they will pass your information onto the credit sector for further review.
  3. It is probable that Sallie Mae will invite you to provide a third- party documentation to help support your claims. If this is the case, you will be invited to send supporting information to them via one of the following Fax, Mail or Email.

You should take into account that Sallie Mae student loan appeal requests are evaluated on case-by-case basis and that your appeal will not be automatically approved. Appealing process takes some time and it could take up to a week for your application to be reviewed and a decision on your appeal to a student loan denial to be made.

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Student Loans Forgiveness Opportunity with Sallie Mae

Student loans are designated to give assistance to students in paying for their educational expenses, which is beneficial to millions of students in the terms of their pursuit for successful career. However, student loans can lead into a deep financial crisis if you let your debts pile up and it can take years to repay your loan. Though, there is a loan forgiveness program offered by the federal government intended to help a selected group of college graduates to repay their student loans. This group includes nurses, teachers and law students who choose to work in areas in high demand such as high need healthcare facility, low-income schools or as public interest attorneys with deprived individuals. Student loan forgiveness is offered to these professionals in exchange for certain number of years service in the fields above-mentioned. Sallie Mae Loan holders may apply for this loan cancellation program if they meet certain eligibility requirements.

Are you Eligible for Sallie Mae Student Loan Forgiveness?

To qualify for the Sallie Mae Student Loan Forgiveness, you must meet certain criteria:

  • You must have started your student loan with Sallie Mae after June 30th, 1985 and no later than July 1st, 2009;
  • Your student  loan debt cannot be over $100,000;
  • Your Sallie Mae loan must be in good standing;
  • You cannot presently be an enrolled student at a qualified institution.

In addition, every of the particular loan holder categories must meet additional conditions in order to qualify.

Nurse Student Loan Sallie Mae Forgiveness

RNs, LPNs, nurses with advanced degrees, and particularly nurse faculty are all in high demand in the USA today. In order to qualify for this cancellation opportunity, professionals in this field must:

  • Be holders of student federal loans and
  • Work in a high demand healthcare facility

Teacher Student Loan Sallie Mae Forgiveness

To be eligible for teacher loan cancellation, borrower must:

  • Work in a designated low-income public school or private non-profit school for at least five consecutive years or
  • Teach one of critical need study area, such as math, science or bilingual courses
  • Works with disabled children
  • Works In early childhood programs.

Law Student Loan Sallie Mae Forgiveness

Field of public interest law is in high need and attorneys who work with disadvantaged individuals are eligible to apply for their student loan cancellation.

How to Apply for Student Loan Sallie Mae Forgiveness

  • First make sure that your student loans meet the criteria
  • Make 120 required payments under one of Direct Loan repayment programs such as Standard Repayment Plans, Income Contingent Repayment Plans and Income Based Repayment Plans
  • Find employment as a teacher in certain schools or fields for at least five consecutive years , as a nurse in high need healthcare field or a public interest layer
  • Fill out a forgiveness form from the Department of Education
  • Get your teaching certification from the school’s administrator or your employer in order to qualify for Sallie Mae student loan cancellation
  • Following your loan forgiveness application is finished send it to your loan servicer for the further processing
  • If your loan provider finds that you are eligible for student loan forgiveness, you will be mailed a confirmation for the cancellation balance.

Don’t miss the opportunity to get your student loans cancelled. If you find that you qualify, apply today for your Sallie Mae student loan forgiveness.

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Scrutinizing Sallie Mae Student Loans

Financial Aid for Students by Sallie Mae at a Closer View

Sallie Mae or SLM Corporation (originally the Student Loan Marketing Association) is one of the largest private student loan lenders in the USA which offers a great number of loans to undergraduate, graduate and professional students. The company in the beginning provided student loans offered by the federal government under the Federal Family Education Loan Program (FFELP) but nowadays it provides private student loans and it has more than 10 million borrowers. Sallie Mae Student Loans are established in 1972 and have helped millions of people in the USA to reach their goal of a higher education since then. Today, this company is considered to be one of America’s leading private student loans providers because of its low interest rates, the flexibility of repayment, and many loan alternatives.

Sallie Mae Student Loan Options

There is a wide variety of Sallie Mae student loans offered to undergraduate, graduate and professional students and the most popular are Smart Option Student Loan (for undergraduate and graduate students), Career Training Smart Option Student Loan (for undergraduate students), residency and Relocation Loans and Bar Study Loan (for graduate students).

Smart Option Student Loan

This type of Sallie Mae student loan is their brand private student loan and it is intended to be of assistance to both, undergraduate and graduate students. Consider taking this student loan if you are looking for the best private student loan for you. Smart Option Student Loan is school-certified and has low interest rates, offers three flexible repayment options with no starting fees. Also, this Sallie Mae student loan type offers borrowing limit of 100% of cost of education with a minimum amount of $1,000. This borrowing plan is, like the other private loan options, based on credit – you need to have a good credit history in order to apply. In case of a bad credit history, you still can apply, but you need to have a creditworthy cosigner. At present, Smart Option Student Loan has APRs from 2.25% to 9.37%, depending on the borrower’s and cosigner’s credit score.

Career Training Smart Option Student

This loan plan is similar to the standard Smart Option Student Loan with only exception that student must be enrolled in a qualified degree program to be eligible. You are permitted to make interest-only payments during your time in school so as to reduce your payment amount when the definite repayment period begins after you graduate.

Residency and Relocation Loan

The Sallie Mae Residency and Relocation loan is a private educational loan introduced with an intention to help students enrolled in their last of either medical or medical school to pay for academic expenses. To be eligible for this loan you must be enrolled at a qualified medical, dental school or in final year of your studies. Minimum amount that you can borrow at start is $1,000 and go up to $15,000. Which is advantageous is the fact that you aren’t required to make payments while you are still attending school. Another great thing about this borrowing plan is that it can cover nearly any cost associated to school training programs as well as expenses related to traveling to interviews for residences and relocation costs.

Bar Study Loan

This student loan plan is designated to assist students who are enrolled in their last year of law school in paying for all the expenses associated to attending the final law school and especially the costs related to studying for the BAR exam. To qualify for the Sallie Mae Bar Student Loan, you must be enrolled in final year of the study at an ABA-accredited law school or have recently graduated. In addition, you must take the BAR exam no later than twelve months after you graduate. Loan amounts start at $1,000 and goes up to $15,000.

Sallie Mae Student Loans Repayment Options

There are several repayment plans offered under this private student loan like following:

  • the Fixed Repayment option which obliges you to pay just $25 on monthly bases while you are in school and can enable you to save more than 20% on the total cost of your student loan compared to the cost of the loan with deferred payments;
  • the Interest Repayment plan is a great option for those who can afford to make interest payments while still in school, which can enable you to save more than 25% on the total cost of your student loan compared to the cost of the loan with deferred payments;
  • Deferred Repayment plan is the best solution for those students who are not able to repay their loan while in school, since it allows borrower to defer all payments after graduation.

Sallie Mae Student Loans Outline

All above mentioned favorable conditions related to this type of private student loan, like diverse loan options, flexible repayment conditions, the low interest rates, make Sallie Mae Student Loans a leader in private student loans. However, it is recommendable to explore the numerous other borrowing options like Federal Student Loans, college scholarships and grants and other types of financial aid for students before you apply.

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