Negotiations with student loan lenders can take many different forms. In some cases, people fall behind and try to negotiate a final payoff to settle the debt. Others try to get a lower interest rate or reduced payment.
Because Sallie Mae/Navient may treat things differently than Wells Fargo or the Department of Education, we won’t focus on any particular lender. Instead, today’s negation steps will address things that are common to all lenders and apply to most negotiations.
Step #1: Make sure negotiation is even possible.
In some cases, the terms of the contract are the terms of the contract, and there is no room for negotiations. A good starting point is to ask the person you are talking with if they have the authority to settle the debt or to modify your plan. If they don’t, there isn’t much point in trying to convince them of anything. If you want changes made to your student loan, be sure to talk to someone with the ability to make those changes.
One thing to be on the lookout for is lenders who service loans for other companies. If you took out a loan with company A, but company B is the one that collects your payment each month, company B may not have the ability to make any changes to the loan. In that case you would have to reach out to the company that actually owns the debt, not the one that services the debt.
Step #2: Put yourself in the position of the person on the other end of the phone.
The person you are chatting with may be working long, depressing hours in a large call center. They may not have any financial interest in any particular outcome. Instead, they are just trying to do their job, get through the day, and collect a paycheck. If this is the case, find out what it is that they hope to accomplish with the call. If you learn their goals, you may be able to find a solution that helps everyone get to a desired outcome.
Negotiation Tip: The best negotiators don’t always “win” negotiations, instead, they find a way to create situations where everybody comes out ahead.
Step #3: Don’t be a jerk.
If you are trying to negotiate something with your student loan, it likely means that you are asking for help. Being a jerk on the phone, or talking down to the people you are chatting with will not get you anywhere. Your odds of success are much greater if the person on the other end of the phone wants to help you.
Step #4: Try to find a common ground.
If you learn that you are talking with someone in a Tulsa call center and you happen to have an Aunt in Tulsa, try to make some small talk about Tulsa. The representative you are chatting with may enjoy the break from the monotony of student loan discussion. Plus, if they can relate to you, they are more likely to try and help out.
However, be careful not to get too distracted. You don’t want to get anyone in trouble. That will not get you any closer to reaching the deal you want.
Step #5: Stick to the facts.
Sharing your anger or your feelings may make you feel a little better, but it likely won’t get you any closer to your desired outcome. If you think something about your student loan isn’t fair, it really doesn’t matter. Lenders are not about being fair or putting a smile on your face, they are in business to make money. Focus on the facts of your loan and your situation.
Step #6: Don’t give away the farm.
If you do find yourself in a negotiation for lower payments, don’t start out with the most you can afford for the month. If $600 per month is the absolute most you can pay, start out by explaining why you think $300 or $400 is the appropriate monthly payment. If your lender pushes back, you still have a chance at ending on a payment that you can actually afford.
Step #7: Be analytical the entire time.
When you are negotiating, try to figure out why your lender is making a particular suggestion or comment. If you want them to take certain course of action, think about the different things you could do or say that would get them to act as you want. Emotion can be persuasive, but it can also cloud your judgment. Try to think a couple moves ahead and you will have a much better outcome.