Get Out of Debt Guy

Are There Any Programs to Help With My Federal Student Loans?

Posted November 11, 2013

WRAL Reader Question

Dear Steve,

Consolidated 2 federal loans upon graduation. Unknowingly signed up for 300 term conditions in 2007. I have been paying $325/month since 2007 and the balance is still what the principle balance was in 2007. My beginning balance was $43000 and i still owe this amount.

My loans have been sold multiple times and i am now with Sallie Mae. The only concession Sallie Mae has offered to reduce my debt and pay off my loan quicker is a .25% decrease in interest by setting up direct payments with Sallie Mae through their website. I want to pay off my loan, but I need interest rate relief and i think paying $325 at a minimum for 30 years for a $43000 loan is ridiculous. Are there any programs that can help me?


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Dear Shana,

While it might not feel like it you are a lot further ahead than a lot of people who now owe more on their student loans even though they've been making payments.

It sounds like you are on some interest only repayment plan and that just buys you time but won't get you out of debt. So we need to change things around a bit.

Sallie Mae might be servicing your loans but if these are truly federal loans then you have some good options to deal with them.

It sounds as if you can make the $325 payment without a problem. And while I have no idea what your interest rate is now you might want to look at the federal Direct Loan program to see if consolidating those two loans into one will give you a better overall interest rate.

The best way to get the loans out of the way is to make the standard 10 year payment , be eligible for a public service loan forgiveness program, or even an income based repayment program. All approaches have their pros and cons so I invite you to review your options by reading The Ultimate Guide to Dealing With Student Loans You Can’t Afford.

My guide covers a lot of options and gives you all the links you need to get going on them.

Be aware, there is a growing group of less than reputable for-profit student loan assistance companies popping up that are selling help you can get for free directly from the U.S. Department of Education. Watch out.


Steve Rhode
WRAL Get Out of Debt Guy

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1 Comment

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  • bmw11 Nov 13, 2013

    Grimreaper, your comments arent helpful so why make them? They already have the debt.

About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.