The challenge for students seeking payment reductions through Sallie Mae involves dealing with a myriad of rules and requirements, especially if they hold any combination of federal and private loans.

Since it was converted from a government agency to a for-profit company in 2004, Sallie Mae has focused primarily on private student loans, which are generally not eligible for government-mandated payment reduction programs such as income-based repayment (IBR) or pay-as-you-earn (PAYE). Students with private loans are left with the option of negotiating directly with Sallie Mae for payment reductions.

Key Takeaways

  • Millions of Americans pay student loans, many of which are backed by the federal government through Sallie Mae.
  • Lowering your Sallie Mae payments could be an option depending on the type of loan you have and your own financial situation.
  • If you feel that you might qualify for a reduction, be sure to know who to call and what to say - and be persistent.

Know What Type of Loans You Have

Many students have a combination of private and federal loans through Sallie Mae, which is why it can be so confusing. Federal loans may be eligible for income-based reduction programs; however, private loans are not. If you have several federal loans, consider a federal direct consolidation loan that could streamline and possibly reduce your payments.

Document Your Financial Hardship

If you have a private loan, you first need to demonstrate financial hardship as the reason why you need your payments lowered. In addition to documenting your overall financial situation, you need to show that your current student loan payments are too high relative to your income and other expenses. Total your Sallie Mae private student loans, determine the interest charges for each loan, then add the total monthly payments. The more information you can gather, the easier it will be to make your case that your payments to Sallie Mae are unaffordable.

Make the Call, Again and Again

Call Sallie Mae to explain your circumstances. Initially, you might be in contact with a customer service person who may not have the authority to discuss any payment reduction plans with you. If you run into a dead end, you can politely ask to speak with a supervisor. The key is to maintain your cool and always be polite. It’s better to end a call before you start to express any frustration and try again the next day. At some point, you will make contact with a customer service representative who can help you.

Know What to Say

Your approach to the call should be direct and succinct with a polite tone. Sallie Mae is under no obligation to offer you a payment reduction. However, if you reach the right person, and you use the right approach, he/she is usually willing to work with you.

Here’s an example of what you might say when you reach someone: “I am doing everything I can to keep current with my private Sallie Mae loans, but I can no longer afford the payments. I am hoping to find a workable solution that will allow me to fulfill my obligation. I understand there is a rates-and-reduction program that can review my situation and offer solutions. Can I speak with someone about that?”

Go Directly to the Source

If you still can’t get through to someone in customer service, call the rates and reduction program directly at 877-770-4157. The line is often busy, but when you do get through, you need to provide all of your financial information for evaluation. If it meets the program's criteria, you will be offered a rate reduction plan that can lower your interest rate or extend your loan period, either of which will lower your monthly payment. However, these are temporary fixes that could increase your overall loan cost.

The Bottom Line

When you’re dealing with Sallie Mae, you are dealing with a huge corporation that is beholden to its shareholders. Where profits are concerned, Sallie Mae is not in the business of reducing its revenue if it doesn't have to, but it will work with you to avoid a default. If you're prepared, persistent and polite, you’re likely to get the help you need.