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If you would like to settle your student loan debt, make sure you go through the steps below. Before you decide to settle, find all your possible options first. Who knows, you may be able to have your student loan debt completely forgiven.

Student Loan Forgiveness

Starting July 2009, you will be able to find more and more programs available to forgive or cancel your student loan debt completely. People who have certain jobs can have their student loan partly or even entirely forgiven. Civil servants, volunteers and those who work in the health care field may be eligible for loan forgiveness. Also those working for any form of government and make less than a certain amount of money annually may also be eligible for the program.

Also, you should search and explore your options more because there actually are programs available that allow you to lower your payments based on a sliding scale. Some people even qualify for a $0 payment. That is why you should research all your options before you go for a student loan debt settlement.

Student Loan Debt Settlement

If you are trying to settle your student loan debt, make sure you understand that the general rule of thumb is to subtract the interest over the life of the loan and offer to pay the principle amount. If your student loan debt is still very current, what you can do is try to shave off up to 30% of the loan with a settlement offer. Calling your lender and offering them only a small fraction of the loan will most likely not work. Lenders will want at least the principle repaid, if you can’t pay the interest.

If the loan has already gone to collections then you can get away with a lower settlement offer. Start by offering 25% of the loan amount, and if that doesn’t work go up from there. You can usually get a collection agency to settle for around 50% of the original loan amount.

Create your fund first

Make sure you have enough money to offer a lump sum payment to settle your student loan debt. Without having a lump sum payment to offer, the chance to get a decent settlement will be very small. If you are struggling, try and save money and create a fund dedicated for this. If you try to make a settlement offer and have a large amount to give them in one payment you are more likely to be successful.

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