Can I Get My Sallie Mae Student Loans Forgiven From My Public Service?

Question:

Dear Steve,

I had Sallie Mae student loan…it was sold to Navient which turned it into a private loan or so they tell me. We have tried the loan forgiveness or reduction twice with no results because it’s a private loan. The lender as so stated on his account site says “Navient Federal Loan Trust” How can this be a private loan when it says Federal…what am I missing? I also have one through ACS, which they won’t forgive. I have almost 10 years of federal service, so I need to figure this out.

Another woman asked the same question. So as you suggested, I went to the National Student Loan Data System. I found three loans:

1. FFEL Consolidated
2. Stafford Unsubsidized
3. Stafford Subsidized

Is there any way for me to receive forgiveness under the Public Service Loan Forgiveness Program? Any advice would be helpful.

Chris

Answer:

Dear Chris,

Thank you for writing me.

If your loans are listed on the National Student Loan Data System they are federal loans.

Maybe you do have some other loans that are private loans?

In order to be forgiven under the Public Service Loan Forgiveness program you must first consolidate them into a Direct Consolidation Loan. Payments made before you do that, don’t count towards forgiveness.

The good news is your loans appear to be eligible to be included into a Direct Consolidation Loan and you can drop the previous FFEL Consolidated Loan in with them when you consolidate the rest into a Direct Loan.

Once you consolidate them into a new Direct Loan then it will require 120 on-time, and full payments for you to be qualified for forgiveness. However, you can put the Direct Loan on an income contingent repayment plan and then reduce your monthly payment based on your income. You can use this online calculator to figure out what your payment would be.

These new smaller monthly payments would count towards the 120 required payments even if they are a reduced amount.

You might want to read about the pros and cons of the income driven plans.

So it sounds like if you start now, in another ten years your remaining loan balance could be forgiven under the Public Service Loan Forgiveness program.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.