Like so many others on this thread, I made a stupid decision, and being a first-generation college student, my parents did not know better. Long story short, I am 220k in debt with Sallie Mae, and do not have the income to make the monthly payments. When I say I don't have it, I mean my monthly income is essentially the same as my Sallie Mae payment (I make 2,600 a month; they want 2,500 a month). I also have rent/living expenses that take up 50% of my income at the moment (I know this is not good, but I'm locked into a lease and there is nothing I can do about it for the time being).
I have tried refinancing through other places, but I cannot get approved anywhere. My parents cosigned my loans for me, and they also have no money. We lost a lot of money due to parents getting sick, unexpected deaths of extended family members, and the economy in general. I do not know what to do. I have tried applying for new jobs, but at this point, it isn't happening. The only place I got approved was YRefy, and even there, the payment was 2000, which is still not possible, and required me to default on my loans so they could refinance, which would destroy my parents' credit.
I genuinely do not know where to go from here. I have basically accepted that my loans will go into default, but what do I do from there? I work in the legal field and am planning to obtain certifications that will increase my income, but this is still at least 2 years away, as I cannot afford them now and do not want to take on even more debt.
My main concern is what will happen to my parents? I have virtually 0 assets they could take from me (I rent an apartment with a roommate, I don't own a car, and I have less than $2,000 in savings), so does this mean my parents would lose their house? I cannot get them released from the loans without making a year's worth of payments, and I can't even make a month's worth.
Literally any advice would be greatly appreciated, even if it's about declaring bankruptcy or how this would affect my parents.
Desperately Need Help – Sallie Mae
byu/PromptCute8480 inStudentLoans
Posted by PromptCute8480
4 Comments
What do you mean you work in the legal field? You should be an attorney with $220,00 worth of student loans which would make 4x your monthly income
Anyways look into the Brunner test. A majority of people don’t pass / qualify the Brunner test
I’d pursue bankruptcy if you have the funds.
Just to confirm, all of these loans are private, correct? No federal loans? Only federal loan servicers can garnish your wages (or your cosigners’ wages) automatically.
If these are 100% private loans then you would have to 1) go in to default, 2) Sallie Mae would have to sue you, and 3) they would have to win before they can garnish any wages. The amount they can garnish varies by state but I believe the max is 25% of disposable income.
The other thing to consider is the hit to your credit score, and to your parents’ credit score. This could impact all of your ability to get a car payment, a credit card, or get approved to rent an apartment. Because student loans are unsecured loans, Sallie Mae can’t take your parents’ house, but if your parents have a mortgage, their wages being garnished could impact their ability to pay their mortgage.
I’m sorry you’re in this situation. You aren’t alone and you’ll figure out a way to navigate it.
Have you given Sallie Mae a call? Sometimes they will work with borrowers experiencing financial difficulty and sometimes they won’t.