It’s unlikely that there’s any one in this world who, when offered complete loan forgiveness, would shrug and say “nah, thanks, I’m good.” Paying back student loans is a bummer, any way you slice it. And yes, it sure would be nice if those loans just magically evaporated into thin air. Unfortunately, that might just be a pipe dream.
Loan forgiveness is pretty hard to come by. And for borrowers wondering about Sallie Mae loan forgiveness, the reality is that, much like the red wine stain on the rug, those loans are unlikely to evaporate into thin air. Sallie Mae—aka the SLM Corporation— was created in 1972 as the Student Loan Marketing Association, a government-sponsored enterprise that serviced federal education loans, and it has evolved over the years.
In 2004, Sallie Mae became fully privatized, and in 2014 split into two companies; SLM Corporation, which solely originates private student loans, and Navient Corporation, which issues federal loans.
And currently there is no such thing as private student loan forgiveness or Sallie Mae signature student loan forgiveness.
That’s right—forgiveness is limited to federal education loans. And even then, the options are limited. There are federal loan forgiveness programs available for those who go into public service or teaching. But other than that, it’s extremely difficult to cancel student loans, because discharge requirements are stringent.
What If You’re Not Eligible for Loan Forgiveness?
If forgiveness seems a longshot for you, don’t despair—you could also look into forbearance or deferment, a temporary reprieve from payments that can give you a bit of breathing room. (Some private lenders, including Sallie Mae, also offer forbearance for those who qualify, although Sallie Mae currently charges a fee.) While these might be good options for temporary relief, you may still need to seek out other solutions for reducing your payments in the long term.
There also are income-driven repayment options that can help you manage your federal loans. For qualified applicants, these limit the amount of your income that goes toward student loan repayment, and typically stretches your loan payments out over a longer period of time. Federal Direct Loans (subsidized or unsubsidized) and PLUS loans are eligible for some type of income-driven repayment plan.
It Doesn’t Hurt to Ask
Of course, there’s never a guarantee that calling your lender and asking about alternate solutions will change the reality of your situation. But that doesn’t mean you can’t ask. If you feel comfortable calling Sallie Mae directly, you could ask about other repayment plans they might offer or what ideas they might have for your situation—at the very least, it doesn’t hurt to learn more about your loans.
Looking Into Refinancing
If the offer isn’t doing you much good, you can always keep looking or do some research on refinancing.
You could potentially reduce your interest rate by refinancing your student loans with a different private lender, such as SoFi, especially if you have good credit history and strong potential earnings.
If you’re approved, the new lender will pay off your servicer(s) and issue you one new student loan—hopefully with a lower interest rate. A lower interest rate can save money on interest payments over the life of the loan—provided the loan term isn’t extended.
Though you can’t combine federal and private loans through a federal loan consolidation program, some private lenders, like SoFi, will refinance both federal and private loans.
If you’re refinancing several loans, you can look at the interest rate for each to be sure you’re really improving your situation. With SoFi, you’ll be given a choice between a fixed or variable-rate loan, and you may be able to shorten or extend your loan payment.
For example, you could extend your loan term if you’re hoping to make your monthly payments more manageable—or you could opt for a shorter loan term to try getting out of debt sooner.
You’ve probably been warned that you could give up some important benefits if you refinance your federal loans through a private lender, and it’s true—you’ll lose access to federal repayment programs.
For example, if you think you have a chance at qualifying for federal student loan forgiveness someday (after 10 years of making qualifying payments), and you’re prepared to put in the time and effort required to be approved, you may wish to stick with your federal loans. Also, if you run into a rough patch, you’ll likely qualify for a longer break from payments under the Department of Education’s forbearance policies.
Refinancing With SoFi
But refinancing with a private lender can come with perks of its own. For example, SoFi will honor the first six months of any existing grace period on loans it refinances. Unlike some other private lenders, SoFi doesn’t charge origination fees for student loan refinancing, either. We also offer member benefits like career coaching and job search support.
SoFi is also known for its customer service, so if you’re curious about what student loan refinancing could do for you—in general and specifically through SoFi—you can gather your questions and reach out to a representative. Here are a few questions to get you started:
1. What are some of the repayment options (terms, interest rates, etc.) available through refinancing?
2. What are the pros and cons of combining my federal and private student loans into one payment?
3. What qualifications will lenders look at to determine whether they’ll refinance my student loans?
4. Why should I choose SoFi?
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SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE
FOR MORE INFORMATION. Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.