Consolidating private student loans in default

Under the GRP, the borrower only has to pay accrued interest for the first 12 months of repayment.This means that recent graduates have 18 months before being required to pay toward the principal.

To qualify, borrowers must first make three consecutive on-time monthly payments at the reduced rate.

According to Sallie Mae, “Most participants successfully complete the program and return to current payments.” Sallie Mae also claims that it will extend the reduction period for some borrowers, based on employment status and other financial indicators.