Can FAFSA help refinance predatory Sallie Mae loans with lower interest rates?

Unfortunately, FAFSA is just the application for federal student aid, not a refinancing program. The problem is that Sallie Mae loans are PRIVATE loans, not federal student loans, so they aren't eligible for federal repayment plans or consolidation programs through the Department of Education. Your son has a few options though: 1. Look into private refinancing companies like SoFi, Earnest, or CommonBond that might offer lower rates 2. Check if his school offers any loan repayment assistance for teachers 3. See if he qualifies for Public Service Loan Forgiveness (PSLF) for any federal loans he might have

Sallie mae is THE WORST!!!!! I had them for 2 years and they kept "losing" my paperwork and charging me late fees when i had proof of payment. run away as fast as possible!!!! their customer service is useless too, they just transfer you around for hours until you give up.

Financial aid advisor here. Your son is in a common but difficult situation with private student loans. To clarify some misconceptions: 1. FAFSA is only the application form for federal aid, not a loan program itself 2. Federal loan programs (Direct Loans) cannot be used to refinance existing private loans 3. The Department of Education has no authority over private lenders like Sallie Mae Here are actual options: 1. For the PRIVATE loans (Sallie Mae): - Shop for refinancing with better terms through credit unions or banks - Check if your state offers any refinancing programs for residents - Look into employer student loan repayment benefits (some schools offer this) 2. For any FEDERAL loans he might have: - Income-Driven Repayment plans can lower monthly payments - Public Service Loan Forgiveness if he's at a qualifying school (10 years service) - Teacher Loan Forgiveness (5 years at qualifying school) The key is separating strategies for federal vs private loans, as they have completely different rules and options.

i had sallie mae too and escaped!! refinanced with earnest last yr and dropped from 10.4% to 5.8% which saved me like $220/month!! my credit score was only like 680 too so not amazing. tell ur son to try applying to 3-4 places on a weekend cuz the applications are pretty quick and they only do soft credit pulls until you accept an offer

Have your son look into filing a complaint with the Consumer Financial Protection Bureau about the payment application issues. Sallie Mae has been hit with lawsuits before about their practices. Document EVERYTHING - dates, confirmation numbers, screenshots of payments, etc. Then tell Sallie Mae you're filing a CFPB complaint. Sometimes just mentioning that gets them to suddenly "fix" the problems.

I spent MONTHS trying to get through to someone at the Federal Student Aid helpline about a similar issue (I had mixed federal/private loans and needed help figuring out what was eligible for forgiveness). It was absolutely maddening - either perpetual hold or random disconnects. Finally found this service called Claimyr (claimyr.com) that got me through to an actual human at FSA in under 30 minutes. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ It was worth it to finally get accurate information about my federal loan options and confirm that yes, my teaching position qualified for forgiveness. Your son should definitely call FSA directly about his federal loans - they can walk him through all the forgiveness options for teachers. The private loans are a different beast though.

To answer your follow-up question: Yes, teaching in a low-income public elementary school likely qualifies for Teacher Loan Forgiveness on federal loans. He needs to complete 5 consecutive years of teaching. Elementary teachers can receive up to $17,500 in forgiveness if they teach special education or up to $5,000 for regular elementary education. The school must be listed in the Teacher Cancellation Low Income Directory. For credit unions, look local first - many offer special rates to community members. Also check if his school district partners with any specific financial institutions that offer educator refinancing programs. PenFed Credit Union and First Republic have had competitive rates recently for borrowers with good credit scores.

Something else to consider - has your son checked if he's eligible for any income-driven repayment plans on his federal loans? The new SAVE plan can significantly reduce monthly payments based on income and family size. As a teacher with a child, he might qualify for very low payments on the federal portion. Some borrowers are eligible for $0 monthly payments while still making progress toward forgiveness. This won't help with the Sallie Mae loans, but freeing up money from federal loan payments could help manage the private loan burden. For the Sallie Mae issues specifically, document every payment with dates, confirmation numbers, and screenshots showing how they're misapplying funds. Contact the loan servicer in writing (not just by phone) and request a detailed explanation of how payments are being applied. If they don't resolve it, escalate to their ombudsman office, then CFPB as others suggested.

One more thought - if he's teaching in a Title I school, he might be eligible for the Teacher Education Assistance for College and Higher Education (TEACH) Grant program for any future education. It provides up to $4,000 per year for teachers who commit to teaching in high-need fields at schools serving low-income students. If he's considering a master's degree to increase his salary, this could help fund it without taking on more loans.