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Is Student Loan Debt Negotiable?

There is a growing debate over the student loan debt problem in America.  Millions of former students struggle to keep up with their student loan payments which have a carry over effect in areas such as car loan and mortgage payments.  It is widely accepted that student loan debt repayment is as sure as death and taxes, but is that really the case?

The Student Loan Debt Problem

If you are one of the 44 million people in America that have student loan debt, you know what it feels like to be frustrated with this seemingly unforgivable burden.  Currently, the total student loan debt in this country amounts to $1.5 trillion.  The average debt for each student is $37,172.  With so many people struggling with this debt, what can be done?

Student Loan Debt Settlement

If you want to pursue the settlement of your student loan debt, you must be struggling with that debt.  You usually have to be in default and even in collections.  If you have the income to make payments, you may not be able to pursue settlement.  Many borrowers seeking settlement have a few options:

  • Pay your entire balance and interest already accrued;
  • Pay the entire balance and half of the total interest;
  • Make a payment totaling 90% of the balance owed.

These settlement options do not offer as much relief as that of credit card or medical debt.

Some People Are Not Eligible for Settlement

If you were hoping to pursue debt settlement as an option for relief from oppressive student loan payments, you may not be eligible.  You are not eligible if:

  • A judgment exists against the debt in question. If you have a judgment regarding the student loan debt, you must honor the judgment and you cannot settle;
  • You have committed a form of fraud called “strategic default”. This is when a borrower intentionally defaults on their loan just to open the settlement option;
  • You have money on the horizon. If you are going to inherit a large amount of money or you have access to it, you will not be allowed to settle.

So, you think you are eligible to settle.  Now what?

Starting the Student Loan Debt Settlement Process

If it is time to consider settlement, you have probably already been contacted by a debt collector at least once.  While a normal debt settlement can often easily be done by an untrained consumer, student loan debt is a different story.  If you make contact with a debt collector, be sure not to:

  • Complain about the debt and make it personal. It will not help;
  • Mention ANY assets;
  • Make any threats.

If you are struggling with student loan repayment, you need the skills and experience of a licensed attorney.  Elias Dsouza can help you navigate the complex negotiation process.  Contact Elias today for a free consultation.

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