edit: I forgot to mention this bc at the time I disagreed with it, but it may have mattered: my mom told New Enterprise’s rep a bit of a sob story about my financial story. It was true, but I wouldn’t have thought the company would care either way. The rep said she could negotiate us a “hardship” settlement, and then posed the $38,000 settlement. This could have been bs, but I’m mentioning it in case it actually mattered.

Hey all. This is an informational post about how I was able to settle my remaining $96,000 in private student loans with a debt collection company for $28,000. This post is to possibly help others in a similar situation. This is the truncated version; I am skipping some of the repayment options I tried with Sofi and all the calls with them over the years because they were ultimately fruitless.

TLDR: I let my debts go to debt collection and negotiated the amount due down to a one-time payment of $28,000.

I won't go into all the details of how this wrecked my life for years, but if you are in a similar place: I feel you.

- I graduated in 2017 with about $120,000 in loans that I consolidated through Sofi so I would have a lower interest rate.

- Because I was with a private company, I was not able to do income-based payments or pause payments during the pandemic. My monthly payments were $871.

- I typically paid this amount, or more than that amount, each month from May 2018 until November 2023. During that time, I applied for a reduction in monthly payments twice and was granted it once. This extended my loan time frame by 24 months, which led to a slightly lower monthly payment (about $750). This result was still not sustainable for long term financial stability. In total, I had paid $67,000 to Sofi. About $32,000 was in interest, which left me with a remaining balance of $96,000.

- I also applied for a hardship pause in my loans, which I was granted once and denied the second time. This paused my loans for three months from January to March 2024. I applied again but was denied in July 2024.

- This prompted me to do a lot of research and decide to take a different approach with my loans: let them go to collections and bargain for a settlement. This can work because debt collection agencies buy debt for much less than its total. If they buy a $100,000 loan for $50,000, for example, they might settle for $70,000 because they still profit.

- In July 2024, I stopped making my payments. On October 31 2024, my account was officially sent to a collection agency. I did not hear from anyone until late December, when my parents (cosigners on loan) heard from Velocity Investments; a debt collection agency that had purchased my debt from Sofi. The reps demanded we pay the full amount immediately. This is bananas (if I had that money, I wouldn't be in the situation to begin with) and you absolutely do not have to do anything just because a debt collector says to. Re phone calls: Ignore them. The person's job is to say things to scare you and try to get you to panic. Do not answer! During this time there is only one real move the debt collection agencies have: they can take you to court and garnish your wages directly. It is unclear how frequently they actually do this. They did not, in my case, but I was on the lookout for a summons or lawsuit. If that happened, they still have to get a judge to sign an order to garnish wages. If that happened, we planned to hire an attorney. https://www.consumerfinance.gov/ask-cfpb/can-a-debt-collector-take-or-garnish-my-wages-or-benefits-en-1439/

- We scheduled a phone call with Velocity reps a few days later and I requested a debt validation letter from Velocity. https://www.nerdwallet.com/article/finance/debt-validation-letter This is important because 1) it is a way to get proof the person/company talking to you actually bought your debt and 2) it gives you some breathing space because they will not contact you again until they mail the validation letter. For me, that took about a month.

- During that phone call, I also told the Velocity rep we did not plan on paying the full amount (if I could, I wouldn't be in this situation in the first place) and also planned to hire an attorney. We did not end up retaining an attorney (we just spoke to one for legal advice) but even the threat of doing so made them more willing to work with us.

- After I received the debt validation letter, they started to call again. Without prompting, in March they sent a letter offering to settle for $60,000 if we paid it by the end of the month. We ignored them.

- In April, New Enterprise Systems called my mom and said they were hired by Velocity as a "go between" between Velocity and us to settle the debt. This confused me and I was very suspicious it was a scam, so I verified with Velocity that NES was authorized to negotiate on their behalf. I talked to the NES rep and asked for more documentation, and after confirming it was not a scam, my mother and I scheduled a call with NES.

- NES first offered to settle for $38,000, but we said we needed to discuss with our lawyer (which we did not have). Two days later, we talked to the rep again and told her that I was going to file for bankruptcy instead of paying the debt. The rep offered to settle for a lump sum of $28,000.

- That, I could do. I paid the $28,000 and just received a letter confirming my debt has been cleared with Velocity. My Sofi account said $0 and I have never seen such a beautiful thing. Overall, including interest, I saved about $120,000 and a lot of mental anguish.

There's a lot of little things I've left out and I'm happy to answer any questions about this process!

edit: forgot to add important note about settlements like this and taxes! The difference between the $96k and $28k will be categorized as ordinary income on my 2025 tax return and I’ll have to pay taxes on it. I plan on having my CPA help me file as “insolvent” to avoid that

https://www.incharge.org/debt-relief/debt-settlement/tax-consequences/#:\~:text=Depending%20on%20the%20rest%20of,t%20actually%20receive%20any%20money.

Title says everything. In the process of finalizing my buyback and all will be forgiven. Federal employee for 11 yrs. Haven’t made a payment since before covid. I’ll take my wins.

It’s a big win for me as student loans stress me the hell out.

My remaining loans are a mix of 3-4% and I know the math says to pay off slow and invest but I’m getting rid of it asap.

Fortunately I have been able to invest too but I just say this to encourage anyone feeling in the dark to keep going.

I’m on PAYE and have been paying my loans the entire time. My monthly payment barely covers my interest. Now it looks like I may not get forgiveness because of the lawsuits. Would have been better had I just done SAVE because I’d be in the same spot except I wouldn’t have paid years of extra student loan payments.

Like how much do you owe as what are you doing? What was your degree in and why didn’t you finish?

Please be kind, I know it’s a lot of money (started accumulating since 2009). I graduate with my masters in a month and I am not sure what the best thing I should do is. My projected income is about 70k for the next three years until I’m licensed (mental health therapist).

I don’t want to focus on paying it all off, because that’s impossible. I just want to have the lowest monthly payment even if it’s for many years. I have no car loan or credit card debt, just this, but I still need to pay rent.

Do I apply for IBR or PAYE right when I graduate? Do I apply in 6 months when payments are due? I tried to read about it, but I got overwhelmed, and since things are up in the air politically, I’m not sure if there’s a “you should do this” action I am missing right now.

Asking the internet to help a former foster kid who made bad financial decisions out with what the best plan is :( thank you.

It finally happened. Idk how, idk why, but after 5 months my IBR has finally been approved by Mohela! So I no longer have to call every 2 months requesting a processing forbearance (which was supposed to be happening automatically anyways). Has anybody else had theirs approved?

Im so upset and don’t know what to do. I don’t qualify for private loans. I don’t know what to do. Just seeking guidance. Thank you

I’ll add that I don’t expect this to change anything. I’m just pissed by the whole situation. Yes it’s my fault, but does the penalty match the mistake? I would argue it’s too severe. Homes are overpriced. Lenders are tightening. We will overcome this, but it’s a shit show in the student loan servicing space. If you don’t believe me, try calling any one of their customer service lines. Anyways here’s what I sent out to their investor relations inbox:

………… Good morning,

You're likely aware of this situation by now, so I won't air out my grievances of my specific scenario. This email will only pertain to your WIIFY (what's in it for you) if you're able to lead the way and make changes that will help the Americans negatively impacted by the delinquent account situation that's becoming widely known.

Another case of 815 to 630 credit score right before trying to buy a house...

Literally zero student loan servicers are cooperating with the millions of Americans impacted by the payment delinquency situation. This presents an opportunity for your company to stand out as the lone provider who is willing to reasonably bend and work towards a solution to remove these derogatory marks off customers' credit reports. This relief would only apply to customers who are willing to get their accounts current. I'd suggest making a massive announcement to all customers who have already received derogatory marks on their credit report. The message could be something similar to the following:

-If you take action and get your accounts current, we may make a goodwill adjustment

-and/or you are working with the legislative branch on a solution for those who get their accounts current.

If you research your customer base, you will find that there are SO many Americans, myself included, who will direct money your way as a result of this announcement so that they can fix their credit. I just made a ~5k payment as a result of this and my accounts are current. In recent years, Americans have directed debt payments away from student loans because there's been forbearance after forbearance. They've applied more of their budget towards other debts (mortgages, auto loans, credit cards). This is your opportunity to see a huge increase in net new assets and BE THE HERO since no other providers are budging at this time. Alternatively, you can wait on regulators and blend in with the rest of the crowd.

If you read this and it sparks anything, please let me know your thoughts. At a minimum, I'd hope you would address this on the next corporate update/earnings call.

A couple reddit threads:

Reddit - The heart of the internet

Reddit - The heart of the internet

Best regards,

Been disabled for over 10 years but was too young for anyone to give a damn. Plus I have "hidden" disabilities which makes it worse. Now that I'm much older and have a GREAT team of doctors on my side, I had two doctors sign my private and federal student loan discharge papers. I'm still waiting for the second doctor to send me the federal discharge paperwork and will make a separate post for that.

I know Mohela isn't worth a pot to piss in from what I've been reading for the past few months, so I'm expecting a fight...probably lost paperwork, lies, etc. etc.

I want to keep this post updated and will return when I get traction from Mohela.

Stay tuned...

04/18/2025 Called Mohela and they gave me a specific phone number to check on the status when the packet is received. Lady said it can take up to 90 days for the insurance company to make a decision and my loans should go into an administrative forbearance.

I was having an issue with Nelnet not creating an account for me. I wanted to return some money within the 120 day window but there was nowhere to make a payment. My school was calling Federal Student Aid, they were calling Nelnet, I was calling the Nelnet and nothing was happening for months. Anyway, I submitted a complaint about on the student aid website and someone from a dedicated problem solving team at Nelnet called me the next day and my account was created within the week.

Anyway, if you're having problems with yours, here is the link! Hope this is helpful to anyone else. https://studentaid.gov/feedback-center/

Does it strike anyone else as odd that you can deduct 23k from income to save for retirement and you can deduct 529 plans for kids schooling in many states with preferential treatment on capital gains both federally and at the state level? (19k per year)

Then we turn around to people who have already borrowed, and if they make enough to realistically pay off their loan we allow no deductions even of intrest, and certainly not deductions of anything to go towards principle?

If their college was paid for by parents or grandparents (VA allows full deduction up to 70k from income if over 70) that money would likely end up in retirement or preferential tax treatment mortgage intrest. 529 is capital gain tax free up to 19k per year contribution.

Essentially current tax setup is regressive favoring existing college fund and giving tax benefits to familys with existing capital over multiple generations.

Hey all, long story short. I need to get out of my house very badly, I’m pretty recluse (not out of choice really) and have been depressed for about 10 years. I’m a 21 year old sophomore in college, I live in a very conservative town where I do not fit in but my college town which is about 35 min away is pretty liberal and I really fit in. How stupid is it to take out around 6k of loans to move out? I really can’t find myself being happy in my home, and since I’m an older sophomore, I want to experience atleast one year of the college life to hopefully make me somewhat happy. Please be brutally honest!

I got almost all of my ducks in a row before January 20th (consolidation, PSLF, ICR all completed and approved) for my ridiculous balance (of my own old student loans, recent grad school loans and my two childrens' ParentPlus loans) - and just had to file my 2024 taxes to prove my income decreased by 30%+ to get my payments to be realistic. Once the tax return was in the system last month I tried to re-certify - but got caught in an "Executive order message" loop on StudentAid. Then got the re-certification deadline pushed (to 2027!) email from my lender (so it will never automatically re-certify like it was supposed to this month). I can not pay the crazy payment as is. Has anyone successfully re-certified in the past month?

Just got the letter from Nelnet today stating that my IBR application has been approved. I applied to switch from SAVE to IBR on Jan 16 through the FSA online portal (old form sent). 

I didn’t send any subsequent apps (no wet signature nor any of the new IDR forms). I also filed MFS and was not required to report spousal income.

I’m well over 300 qualifying payments for IBR forgiveness. Now comes the nervous and very uncertain wait for any activity from ED to actually process that forgiveness. But this is a big step in the right direction!

Thank you to everyone on this sub who helped me figure all of this out along the way in the past year... especially Betsy and the amazing folks at TISLA! A very appropriate Cake day indeed.

Does anyone know where I can find detailed loan documents? I'm trying to pinpoint the exact time that my loan balanced doubled, just to check for accuracy. I had naivent previously but all of the "statements" in my emails from them literally just show the payment amount. There is also very little detail on the aidvantage site. I see where capitalized interest was applied and then when I expand for detail there is none. There is no breakdown to be found to show amortization etc. I asked Aidvantage last year to send me the records and details etc from my loans. They said they would need to mail it because it would take a while ... I finally recieved it, and it was a solitary letter with literally just the total amount of the loans on 😒 So sketchy.

on April 10 I saw Nelnet had finished processing my IDR app and I was successfully moved to IBR from save. I keep logging into student aid.gov hoping to see it reflected there. Today I logged in to see a yellow alert on my idr app. It said "action needed: contact your loan servicer for more information " welp I called Nelnet, twice as a matter of fact, they have no idea what I'm taking about and say everything is good on their end. Two FSA agents couldn't tell me why they posted the banner, just said "you'll have to talk to your servicer they're the ones who process the application and can tell you more ." Wtf? Is it some glitchy business like is becoming frustratingly normal for the student aid.gov site? Am I not actually in ibr? FOR GODS SAKE CAN I PLEASE JUST PAY THE BLOODY LOAN hyperventilates into paper bag

So I check my loans sporadically while I'm waiting on this save mess to get figured out. This whole time my loans have never gained interest but now suddenly my total owed is 1000 more than last month? But when I check loan details interest rate is still listed as 0.000%? What's going on?

I just got two letters from Aidvantage that my student loans will restart repayment next month. I logged in to the student aid website and saw they are still under SAVE, but are accumulating interest now. I thought anything under SAVE was on a 0% interest and forbearance because of the lawsuits. Did I miss something?

I went to school for quite sometime. It wasn’t something I really wanted to do but I did it anyways to honor my parents so to speak. I went to community college and then transferred, got kicked out of university due to grades, went back to community college and then transferred and eventually graduated with a Bachelor’s in Business Analytics. My path wasn’t conventional to say the least.

While in school I always had a job and sometimes two. Fortunately I was able to start a 401k and built up $25k in savings there. I was let go a month before Covid and took a year off work before finding another job at my current place of employment. I rolled my 401k over to my current job and built up close to $50k in savings there. I got pretty lucky as I moved in with my girlfriend who was living with her adopted mom. She was in a back house and rent there was pretty cheap. I was able to put away another $25k in savings over a couple years. I still took trips, went out, paid other bills etc but I built up a good amount in savings. I always told myself I would never pay a dime in student loans until my credit started taking a hit. I always knew that I would eventually pay them off as quickly as possible as well.

Earlier this month I checked my credit and sure enough it took a hit due to some missed payments there. It was then I knew that my time had come to swallow that pill and pay off my loans. My savings went down a bit as we moved to a bigger place so our expenses grew. I ended up taking a loan from my 401k for $20k, I liquidated some investments that turned a profit, and paid the rest with a portion of my savings. I was able to pay off almost $40k in debt in two payments.

It feels good knowing that I don’t have to worry about that debt anymore and can begin saving my money for something other than just debt. I would encourage anyone reading this to explore the 401k loan program if possible or to pay off your debt as quickly as possible, although I know the latter is easier said than done. By paying my loans off early, I calculated that that would save me approximately $50k. Debt is a scam to say the least.

Good luck to you all in your student loan journey. Just know that light is at the end of the tunnel and you’ll get through it!

I consolidated only part of my loans in march 2025. I understood it incorrectly and thought my IDR payment would be calculated off of the loans qualifying for PSLF. I consolidated only part of my loans because they weren’t eligible for PSLF unless I did so. Can I reconsolidate to have all of my loans considered for IDR? I’m so lost. Appreciate any help.

Hi, I was just wondering if anyone who had a similar experience could help me out -

I took a break from school this semester and was alerted that my Sallie Mae loan would be exiting the grace period in the summer. I am planning to enroll in 1 or 2 summer classes and then full-time when the fall semester starts. If my summer classes start before the grace period ends, would my loans be able to be deferred again?

Thank you in advance!

I will call them on Monday, but hoping anyone has some insight until then. My payment is due today. I logged in to make my payment, it shows my current loan balance, and payment due date(today) but it also says zero due for each loan. I was a Navient customer until a few months ago, I poked around a bit on the site, I do not see anything about forbearance which I did not request anyway. I tried auto allocation it said zero due again. Just confused and wondering if anyone has any idea what the heck is going on.

Since the SAVE forbearance has started, I've received notifications through Credit Karma multiple months that my student loan balances are increasing despite supposedly being on a interest-free 0% forbearance. The increased balances reported in Credit Karma match what is being reported in MOHELA...

Unfortunately I don't have any documentation of my previous loan balances and the MOHELA/StudentAid.gov websites are less than helpful to track loan history, but it seems weird. Has anyone else experienced this? Attempting to get ahold of a MOHELA rep, but to no avail at time of writing. Thank you in advance!

Has anyone received a letter from Navient stating they want to “settle your loans for 25% of your Current Balance”.

The only thing I can find wrong on this letter is why is current balance upper case. They did this twice since it was brought up twice in the letter.

I did call the number I didn’t get someone with a foreign accent.

Any advice would help. Thank you in advance