You are here: Home/Debt/ Debt Mindset Series: It’s Time to Say Goodbye to Sallie Mae
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Have you ever felt like someone just wasn’t the right fit in your life, did more hard than good, and you just had to go?
That’s how Jason feels about Sallie Mae. While Sallie isn’t an actual person and is a banking corporation instead, Jason is determined to break up for good by crushing his student loan debt and consumer debt. In today’s debt mindset interview, Jason Butler, a Financial Aid Counselor, freelance writer, and a blogger who runs the site TheButlerJournal.com will share his debt story. Jason educates others about debt, travel, and college while working to pay off $72,000 of his own debt. I was happy to interview a fellow debt freedom fighter and hope you gain a lot from his experience!
Table of Contents
What’s Your Current Debt Situation?
I current have a little over $67,000 worth of debt. The majority of it comes from student loans. I had a hard time finding a full-time job after graduation.
A low point is when I had to decide what was more important between my rent & cell phone or student loans. Of course the rent and cell phone were. Interest, late fees, and taking classes for a couple of semesters added more money to my loan debt.
When Did You Decide Your Debt Was a Problem?
I realized that my debt was a problem in late 2013. I was turning 30 and wanted to do better. I knew the debt was a lot, but not that much.
Did you implement a specific strategy to start paying off your debt?
I read Dave Ramsey’s book, the Total Money Makeover, and knew that was the strategy for me. I got serious in December 2014. I’ve had a couple things throw me off, but for the most part the debt snowball method has worked for me.
Related Blog Post: How to Create a Student Loan Plan of Attack
What were some obstacles you were/are faced with? How did you deal with the days when you lost motivation or slid back into your ‘old ways’?
There were a few obstacles that threw me off. I wrecked my car in 2015 and needed $600 to repair it. My rent increased. I also didn’t have an emergency account when I first started back paying my loans. When some of these things happened I was smack dab in the middle of my debt repayment journey so it was disheartening. On most days I still feel motivated and opted to slow down on making extra debt payments for a few months until my life got back on track. At the time, I was side hustling on eBay which helped me get back on track quicker. The bad times didn’t last long because I was able to get my emergency fund back up to $1,000 by the beginning of 2016.
What motivates you? What would you say to people who think they can’t get out of debt in an attempt to change their mindset?
Not having to pay or get a phone call from Sallie Mae/Navient ever again motivates me. Being able to travel more also motivates me. I love traveling and seeing new places.
To the people who don’t think they can get out of debt, I would tell them to change their mindset. The person who thinks they can or can’t is usually right so that’s no way to start your debt repayment journey because you’ll just be wasting your time.
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Chonce is a personal finance blogger and freelance writer who enjoys sharing debt stories (as she and her husband work their way out of $40,000 in debt) along with talking about saving, budgeting, conscious spending and improving your financial house. In her spare time,she enjoys working out, playing sports with her son, cooking, and thrifting.
Good luck, Jason! I can’t wait to say goodbye to Sallie Mae either!!
Dyana @adebtfreejourneysays
Sallie Mae, or Navient, isn’t my best friend either. Just looking at the balance can really ruin your whole day! This is motivational, I cannot wait to get my last credit card out of the way so I can really start working on my student loan balance. Good luck!
Choncésays
I definitely hear what you’re saying but it’s important to just start somewhere and even automate your debt payments if you don’t want to think about the large balance at first. Thanks Dyana!
If you work full time for a government or nonprofit organization, you may qualify for forgiveness of the entire remaining balance of your Direct Loans after you've made 120 qualifying payments—i.e., 10 years of payments. To benefit from PSLF, you need to repay your federal student loans under an IDR plan.
Today's announcement brings the total loan forgiveness approved by the Biden-Harris Administration to $167 billion for 4.75 million Americans. Thanks to this Administration's efforts more than one out of every 10 federal student loan borrowers has now been approved for some debt relief.
Student borrowers are in crisis due in part to a rise in average debt and a decline in average wage values. A significant portion of indebted college graduates and non-graduate borrowers do not have sufficient income to pay their debts. As unpaid debts continue to accrue interest, repayment becomes less likely.
Your student loan servicer(s) will notify you directly after your forgiveness is processed. Make sure to keep your contact information up to date on StudentAid.gov and with your servicer(s). If you haven't yet qualified for forgiveness, you'll be able to see your exact payment counts in the future.
Delinquency occurs when you fail to pay all or part of your monthly student loan payment. You may be charged late fees for delinquency, which can add to your Total Loan Cost.You may lose any interest rate reduction programs you were eligible for.
If you default on your student loan, that status will be reported to national credit reporting agencies. This reporting may damage your credit rating and future borrowing ability. Also, the government can collect on your loans by taking funds from your wages, tax refunds, and other government payments.
Thanks to the Biden-Harris Administration's SAVE plan, starting today, the Administration will be cancelling debt for borrowers who are enrolled in the SAVE plan, have been in repayment for at least 10 years and took out $12,000 or less in loans for college.
Statement from President Joe Biden on $6.1 Billion in Student Debt Cancellation for 317,000 Borrowers who Attended the Art Institutes. Today, my Administration is approving $6.1 billion in student debt cancellation for 317,000 borrowers who attended the Art Institutes.
Key takeaways. Paying off student loans early can benefit you financially, but it should typically come second to building your emergency fund and retirement savings. People with private student loans or without other debt tend to benefit more from paying off student loans early.
In December 2007, a class action lawsuit was brought against Sallie Mae in a Connecticut federal court alleging that the company discriminated against African American and Hispanic private student loan applicants by charging them high interest rates and fees.
Black and African American student borrowers are the most likely to struggle financially due to student loan debt making monthly payments of $260. Asian college graduates are the fastest to repay their loan debt and the most likely to earn a higher salary to help pay for student loan debt.
The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on your federal student loans after 120 payments working full time for federal, state, Tribal, or local government; the military; or a qualifying non-profit. Learn more about PSLF and apply.
All new Sallie Mae loans are private. But if you took out a Sallie Mae loan before 2014, it might have been a federal loan and is likely now managed by another servicer. Sallie Mae started off under the federal government and provided loans through the Federal Family Education Loan Program, or FFELP.
Private student loans are only forgiven when the borrower becomes permanently disabled or dies. Your relief options will depend on your lender and loan agreement. Contact your lender and discuss your financial situation before defaulting on your student loans.
You may be eligible for income-driven repayment (IDR) loan forgiveness if you've have been in repayment for 20 or 25 years. An IDR plan bases your monthly payment on your income and family size.
Both federal and private student loans fall off your credit report about seven years after your last payment or date of default. You default after nine months of nonpayment for federal student loans, and you're not in deferment or forbearance.
In certain situations, you can have your federal student loans forgiven, canceled, or discharged. That means you won't have to pay back some or all of your loan(s). The terms “forgiveness,” “cancellation,” and “discharge” mean essentially the same thing.
There is no specific age when students get their loans written off in the United States, but federal undergraduate loans are forgiven after 20 years, and federal graduate school loans are forgiven after 25 years.
The default is reported to credit bureaus, damaging your credit rating and affecting your ability to buy a car or house or to get a credit card. It may take years to reestablish a good credit record. You may not be able to purchase or sell assets such as real estate.
Introduction: My name is Wyatt Volkman LLD, I am a handsome, rich, comfortable, lively, zealous, graceful, gifted person who loves writing and wants to share my knowledge and understanding with you.
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