student loan mailbox

The Sherpa Mailbag: Your Student Loan Questions Answered

Michael Lux Blog, Mailbag, Scam Alert, Student Loans 0 Comments

Most days I get one or two emails from readers with very specific student loan questions.  Occasionally I get a question that is worth sharing with the masses…

These are real questions from real readers.  Only names have been changed and numbers fudged to protect anonymity.  If you would like to get your questions answered, send me an email.

Email Question One: Has Sallie Mae made a mistake?


I stumbled across your site while trying to look for an answer. I received an email saying my monthly automatic payments have changed. So I logged into my account to find my payment went from $900 to $200 on my Federal and Private student loans! Then I noticed my balance went from over $70,000 to $26,000!!

As crazy/wonderful as this looks I know this has to be a mistake on their part. I’m not sure what to do in this situation… Why would I want to notify them of their mistake?! And if they finally fix the mistake is there anything I can do legally because I will end up having to pay off more because of interest and the fact I wasn’t paying the normal amount.

What would you do in this situation?  Several thoughts have crossed my mind like paying the whole balance off before they realize.

Thank you,


Thanks for the message Gus!

First, let me applaud you for staying on top of your student loans.  It is easy to ignore the constant emails from Sallie Mae, but they can be really important.

I guess I should jump right into the bad news.  There are two likely explanations for this occurrence.  One explanation would be that Sallie Mae is dividing into two companies.  Unsurprisingly, they have not released all of the details about this corporate divide, so your loans with one company may become loans with two.  If just your federal loans are left (or just your private loans) I would bet that this is due to the company restructuring.  Another explanation would be that some of your loans were sold to a different lender.  Unfortunately these sorts of transactions happy fairly frequently and we are pretty much powerless to stop it.

If your loans were federal loans, the federal government offers a great site for helping you track this information.  The best way to track private loans would be to contact your lenders or check your credit reports.  You can use these tools to follow the debt and figure out what exactly is happening.

Its nice to dream about over $40,000 worth of debt disappearing, but it almost certainly is not happening.

If I were you I would first try and figure out what happened without asking for the help of Sallie Mae.  My next step would be to make sure that you don’t miss out on any payments or get charged any additional interest.  Unfortunately, dealing with this will likely be a headache, but it shouldn’t cost you any extra money.  Call your lender and make sure that you will not run into any additional fees or interest.  If it were me, I’d also try to get some sort of proof of there assurances.

Your email also made it sound like you have the cash available to be paying more than what you are currently paying.  If that is the case, I would highly recommend you pay as much as you are comfortable with.  The more you pay now, the better off you will be in the long term.  Compounding student loan interest can be really painful.

Then again, it is not impossible for them to have made a major screw up.  I think we have all seen varying degrees of incompetence from them.  I’ll be rooting for you and hoping that the unlikely occurs!

Email Question Two: Is it just me, or does something sound fishy?


A friend of mine told me her son was recommended to do this (see following). I told her I thought the practice that is being recommended could be problematic. Could you please let me know if this is potentially problematic:

My friend’s son is in medical school. The school he attends is not accredited so the students are not able to get Federal Student Loans. He was told that if he takes one course per semester at an accredited college in their master’s program – he could get a maximum amount federal student loan each semester and use the excess distribution to pay the tuition at his non-accredited medical school.

Is this practice problematic and if so what could the repercussions be? I want him to stay out of harms way. His mother cannot continue to afford the tuition at his non-accredited medical school – so he thought this might be a solution. I have my concerns.

I look forward to your response,


Thanks for the message Fred!

You are a good friend for being concerned.  There is definitely something fishy going on here.

Student loans can only be used to pay for educational expenses from the school that authorized the loan. Both the student, and especially the school, could face serious consequences for being engaged in such a practice. To have the school recommend this sort of illegal activity would give me serious concerns about attending the institution.

I’m also very curious about an unaccredited medical school. Can graduates of this school become licensed physicians?  I ask this because it would seem opposite the rules of my profession.  Lawyers who went to an unaccredited law school are not eligible to sit for any bar exam except in California.  If your friends son has no chance or a very limited chance of becoming a licensed physician, you may want to steer them clear of that school.

This school seems to be activity suggesting your friends son engage in illegal activity. Based upon the limited information you are giving me, problematic would seem to be an understatement.

Readers: Do you have anything to add the suggestions to Gus and Fred?  Have you dealt with any similar situations?