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Can I Convert Navient/Sallie Mae Private Loans Into a Federal Loan?

Converting private student loans from lenders like Navient and Sallie Mae into a federal student loan eligible for forgiveness would be great. Unfortunately, this move is really hard to accomplish.

Written By: Michael P. Lux, Esq.

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In today’s mailbag, we will take a look at Katie’s student debt problem. Katie co-signed some student loans for her daughter to attend college. The loans were originally with Sallie Mae, went to Navient, and Katie learned that the loans would not qualify for Public Service Loan Forgiveness. She wants to know if she can convert private student loans into an eligible federal loan. If you have a question for the Sherpa, feel free to ask us!

Katie writes:

Dear Loan Sherpa,

I am a co-signer of my daughter’s student loans that we took out about a decade ago (she has a Ph.D. now, at least), and initially, they were Sallie Mae.  Then they went to Navient, I guess. We had always assumed they were eligible for forgiveness for working in certain sectors — public loan forgiveness, I guess it is called. However, we were told that Navient loans are private, and therefore not eligible. Is there any way to convert them?

Thanks for any advice here!


Before Doing Anything: Verify the Loan Status

The tricky part about this loan question is that Navient and Sallie Mae have handled private and federal loans.

The only way to know the status of your loans for certain is to visit the Department of Education’s Federal Student Loan Database. If the loans show up on this database, they are federal loans. If borrowers can’t find their loans in the database, they are likely private loans.

Can Private Loans be Converted to Federal Loans?

Getting back to Katie’s central question, the answer is no. There is no procedure or mechanism in place to change a private loan into a federal student loan. It has been suggested a couple of times in Congress but has received limited support.

If your loan is private, it isn’t eligible for programs like Public Service Loan Forgiveness or repayment plans based upon your income.

Borrowers with Sallie Mae and Navient private loans can slowly convert them into eligible federal debt via creative repayment. However, this approach won’t provide the immediate fix that Katie seeks.

Fortunately, even if you are stuck with private loans, there are a couple of ways to make your payments go further.

Option 1: Take Your Business Elsewhere

One of the biggest developments in student loans over the past five years has been the private student loan refinancing market’s growth. There are now many companies that will refinance old high-interest loans at a lower interest rate. The catch is that you have to be a good credit risk for a new lender to take on your debt. That means a high credit score and sufficient income to pay all of your bills comfortably.

If Katie’s daughter fits the above description, she could refinance without having Katie co-sign. That means the loans fall off of Katie’s credit report, and her daughter potentially gets a lower interest rate and/or lower monthly payments. One benefit of this approach is that it would provide Katie with a cosigner release.

If you are considering going this route, be sure to check out our page on student loan refinancing lenders and strategy.

Option 2: See if Navient can help out

If Katie and her daughter are facing payments that are not affordable, they might be able to convince Navient to temporarily lower their interest rate due to their hardship. This can mean smaller monthly payments and a larger portion of your payment actually reducing the principal balance. This program is called the Navient Rate Reduction Program. The program exists to help borrowers who didn’t have the money to keep up with their student loans.

The problem with the program is that it isn’t a borrower right under the student loan contract. That means that Navient can approve or deny you for the program that their sole discretion.

Final Thoughts on Converting Navient or Sallie Mae Private Debt into Federal Loans

There is no method in place to turn a private loan into a federal loan. For borrowers, that means no income-based repayment plans or student loan forgiveness.

The good news is that even if you are stuck with a private loan, there are at least a couple of ways to make your monthly payments go a little bit further.

Next Steps

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

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