Would I Be Better Off Just Not Paying Navient?


Dear Steve,

I borrowed $70,000 in private loans during my time at school (2002-2007). Since that time, I have had economic hardships, and I’ve also dealt with poor health, saddled with migraines, vertigo and a variety of physical ailments for the better part of a decade.

I am currently applying for disability, though I realize that doesn’t help dispatch my private loans.

That is simply for own personal well-being. Back to SallieMae/Navient, I used up all the other options possible – forbearance and interest-only payments – which has allowed my total owed to skyrocket to $125,000.

I am currently unemployed after being laid off. I am now being asked to pay either $1,200 per month, or select a temporary solution where the length of my loans gets moved five years back (2035 to 2040) and I pay a monthly total of $475 for the next 15 months while they freeze the interest rate at 1.5% on all my loans.

My unemployment check is $269 per month and I don’t have much in my savings. Suffice to say, I am struggling to make ends meet, let alone pay my student loans.

Would I be better off just stopping payment and embracing the consequences that are to come? Or should I select the 15-month route, essentially kicking the ball down the road to be addressed at a later time. Please advise me. I’m desperate.



Dear Adam,

Debt problems are often just math problems wrapped in emotion. From the math you shared, the answer is clear, you can’t afford any payment arrangement.

Kicking the can down the road might feel like it is better because it reduces the pressure you are facing right now but all it really does is make the problem worse later on. You’ve learned that one the hard way.

Obviously defaulting on the student loans has consequences. Your debt will increase, your credit will take a hit, and collectors will want to talk to you. You might even be sued. But so what. If you can’t afford the growing balance and payment they want, what does it matter. See this.

Defaulting on a Navient private student loan debt also comes with some options. If you are sufficiently delinquent, Navient will settle the student loan balance if you know who to talk to. They will settle for a lot less than you owe and allow payments over time at a low or no interest rate. If you want to talk to someone about this approach, then get in touch with Damon Day.

Even if you were to be sued it often turns out to be an invitation to reduce the amount you owe and if you decided to file bankruptcy in the future, a good bankruptcy attorney might know how to deal with these debts in bankruptcy. There are many options to explore. See this.

Being chased by Navient for loans they let explode is not the end of the world. What is the end of the world is being dead broke and having no hope for the future. So let’s flip the script and put you in charge here. If you come to terms with the cons of this approach you can find peace in your daily life.

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

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