Private College Student Loan

What to do with Sallie Mae student loans?

I just recently graduate, I have about 70k in Sallie Mae loans and about 25k in interest so far. My monthly payment will be 1013. I can afford this, but would like to lower my monthly payments to have some more wiggle room in my budget. Sallie Mae does not offer student loan consolidation, and any questions I've asked of them are never answered, they just try to sell me on the 'interest only payments' options instead of helping me figure out how to pay off my entire school bill with a lower monthly payment. I work in the telecommunications industry and got a great job with a starting salary of 55k. My rent is 1200 a month, including utilities. I have to pay my credit card bill with a minimum of $500 a month so I can pay it off in 14 months (if I don't use it.) Any financial advisors out there? Please help!

Public Comments

1. Steph: Unfortunately, when it comes time to repay a loan, you don't get to choose what you'd like to pay. As far as the lender is concerned, you signed a promissory note that - guess what - promised that you would repay the loan over a particular period of time, at a particular rate of interest. Now they intend to hold you to that promise. What lenders DO have are alternative payment plans for people who simply can't afford to make those payments. It's all well and good that a borrower agreed to pay "such and such dollars" every month, but if they finish school and can't find a job, it's that proverbial "blood from a turnip" situation. By the way, congratulations on finding such a great job in this tough economy! Federal student loans - and yes, even those federal student loans that were borrowed through Sallie Mae, offer alternative payment plans to those who qualify. Stafford, PLUS, and federal consolidation loans offer the option of lengthened repayment periods, graduated repayment, and income sensitive repayment. Private loans, like the Sallie Mae Smart Option Loan, or Sallie Mae Signature Loan do not offer those alternative payment plans - that's yet another advantage of the federal loan programs - their flexibility. If Sallie Mae is offering you "interest only", that's an option for you, but of course, you'll pay dearly for electing that option in the long run. The longer it takes you to repay your loan, the more interest you'll pay - that's a pretty basic rule of borrowing. The ONLY way to pay a loan down faster - and SAVE big bucks on interest - is to pay more than the minimum payment every month. Some students make their payment every 3 weeks, instead of every 4, which results in 17 payments a year rather than 12. I'm not quite sure what you're asking, to be honest, because it sounds like you want to know if there's a way that you can pay off your balance at a faster than scheduled rate, while making smaller than normal payments, and I'm assuming that you realize that that's not theoretically (or practically) possible. If you agree to Sallie Mae's interest-only offer, but pay more than that every month, you'll save over the choice of just paying interest only. Other than that, Sallie Mae is under no obligation to offer you a more palatable payment plan - or take into account that your loan is chewing up a larger chuck of your monthly income than you might like. As I said, if these loans are federal loans - Staffords or PLUS loans, then you do have the automatic option to request either extended payment, graduated payment or income-sensitive payment. You'll have to ask Sallie Mae for more information on those options - though you can read about them on this Sallie Mae page: http://www.salliemae.com/after_graduation/manage_your_loans/repaying-student-loans/choosing/ Good luck to you - I'm sorry I couldn't offer any really promising news.