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Posted in Student Loans
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DanCT1981

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What options do I have with private student loan?
Hi everyone,

I first wanted to thank everyone for this amazing forum. I’ve just started to get serious about my financial future and CK has been such a wonderful resource.

I have a pretty specific question about repaying a defaulted student loan.

My $16,000 private student loan from Navient has been in default since May 2006 (with interest, it’s approaching $32K now). I’ve been offered a settlement by a debt collector that I can’t afford and I’m not sure exactly what options I have. As you can probably imagine, I don’t make a lot of money and the idea of paying this down seems pretty daunting.

I have a few questions:

1) I don’t actually see this $16K student loan debt on my CK credit report and I don’t have any records showing I took out the loan. I do believe it’s likely this debt is real because I remember my family sitting down with a financial aid worker at the college and then I signed up something that kept me in school. I realize this was incredibility irresponsible, but I desperately wanted to complete school. Needless to say, I’ve never made a payment.

2) Why wouldn’t this be on my report? Would you recommend accepting/making a settlement offer? Is there any chance there’s a statute of limitation on a private loan from Navient?

3) I have two much smaller defaulted loans on my CK report for about $6K total from Sallie Mae that are listed as closed as of Mar. 20, 2007. I’ve never made a payment on those either and the remarks both say “debt being pd through insurance.” I’ve never been contacted by a debt collector on these ones, but I’d like to figure out what to do about them and how I might go about working out a settlement. Would anyone have any suggestions?

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The private loan from 06 is not on your credit reports due to the seven year credit reporting time period. Odd are it is outside the "Statute of Limitations" to be sued for, but check to see what the SOL is in your state. You are probably off the hook all the way around with that loan and you would be EXTREMELY FOOLISH to contact the company in any way since you said you don't have a lot of money. Contacting them and entering any type of agreement could reset the SOL and put you back on the hook legally.

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For any Federal student loans, you will remain on the hook forever until you pay them.

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Make sure that you take as much time as you need to thoroughly read all that you can about this stuff before you take any action in any way.

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Thanks so much. I asked the collection agency to send me info on the private loan in writing.

How should I proceed in dealing with them moving forward?

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Stop communications with them!! Do not give them any further info and don't request any further info. Do some reading on writing a "Cease & Desist Letter" and you would send them one of those if they continue to hound you or you can contact a consumer law attorney that deals with FDCPA cases. (fair debt collection practices act)

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