how to get my private student loans forgiven

Private loans tend to have higher interest rates for most borrowers, plus there are typically fewer repayment plans and hardship options than federal loans.

If you’re struggling with your education debt, you may be wondering if private student loan forgiveness is an option. Unfortunately, private loans aren’t eligible for most forgiveness programs. However, there may be other sources of private student loan help.

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Can Private Student Loans Be Forgiven?

When it comes to student debt, you either have federal or private loans. Federal loans are issued by the U.S. Department of Education while private student loans originate from banks, credit unions or online lenders. That difference is the reason why private student loan forgiveness is so unattainable.

While federal loans are eligible for programs like Public Service Loan Forgiveness (PSLF), private loans are not. Because private student loans are issued by individual companies rather than the government, it would take congressional legislation to pass any blanket forgiveness measures. And, any measures would likely have to allocate funds to pay lenders on behalf of borrowers rather than just absorbing the cost, making it unlikely that any forgiveness measures would pass.

The only times private student loans can currently be forgiven are in the cases of death or permanent disability—but even in those instances, discharge is typically dependent on your lender’s policy.

5 Ways to Get Private Student Loan Help

While private student loan forgiveness isn’t available, there are other ways to get help paying off your debt. By using these five tips, you can make your loans more manageable.

1. Career-based Student Loan Repayment Programs

Although federal forgiveness programs based on employment aren’t available to private loan borrowers, you may be eligible for career-based repayment assistance programs. These programs are usually run by state governments or professional associations and will repay a portion of your loans in exchange for a commitment to work in a high-need area.

Careers that commonly qualify for these programs include nurses, doctors, dentists, teachers and lawyers. Consider these examples:

  • Nurse Corps Loan Repayment Program. Under this program, you can have up to 85% of your loans repaid if you are a registered nurse, advanced practice registered nurse or nurse faculty member. To qualify, you must commit to working in a designated critical shortage facility.
  • New York State Teacher Loan Forgiveness. If you are a teacher in New York and are employed in a primary or secondary school, you could be eligible for up to $20,000 in student loan repayment assistance. Under the program’s rules, you must agree to teach in a hard-to-staff area or teach a high-need subject.
  • Florida Bar Loan Repayment Assistance. This program provides student loan assistance to staff attorneys employed by legal assistance organizations that receive grant funding. Under the program, eligible attorneys can receive up to $5,000 per year to repay their loans.

To find out if you qualify for student loan assistance programs, contact your state education agency or professional association.

2. Location-based Repayment Assistance

If you’re willing to relocate to another area, you could get help repaying your private or federal loans. Some states and counties offer special incentives to encourage people to move to certain spots. For example:

  • Kansas Rural Opportunity Zones. Individuals that move to designated rural areas in Kansas can receive up to $15,000 in student loan repayment assistance from the state. And, you may also be eligible for an income tax waiver, making the move even more advantageous.
  • Opportunity Maine. College graduates that attended a Maine school and decide to live and work in the state can get reimbursed for their student loan payments via income tax credits, up to an annual maximum.
  • Maryland SmartBuy. The Maryland SmartBuy program helps borrowers pay off their student debt and become homeowners. Through the program, eligible applicants can get up to 15% of their home purchase price to pay off student loan debt (up to a maximum of $30,000).

Check with your state department of commerce to see if there is a similar program in your area.

3. Find an Employer That Offers Student Loan Repayment

A growing number of employers are helping their employees with their student loan payments. Major companies like Estée Lauder, SoFi and Hulu will pay off a portion of your student loans as an added benefit, up to an annual or lifetime maximum. Talk to your human resources department to see if your company has an employer student loan assistance program.

4. Contact Your Lender

If you’re struggling with your payments, contact your lender. Even though private student loans aren’t eligible for loan forgiveness or income-driven repayment (IDR) plans, lenders often have their own programs to help borrowers avoid delinquency or default.

You may be able to temporarily postpone your payments or reduce your payments overall. For example, the following lenders offer alternative repayment options:

  • College Ave borrowers may be eligible for up to 12 months of hardship forbearance.
  • Sallie Mae allows some borrowers to defer payments if they’re returning to school or taking on an internship or residency.
  • Rhode Island Student Loan Authority (RISLA), which lends to borrowers nationwide, is one of the only private lenders that has an income-based repayment option.

5. Consider Refinancing

If you have high-interest private student loans and want to pay them off as soon as possible, student loan refinancing can be a useful strategy. Depending on your credit score and debt-to-income (DTI) ratio, you could qualify for a loan with a lower rate than you have now, helping you save money and pay off your student loans faster.

For example, let’s say you had $40,000 in student loans at 6% interest and a 10-year repayment term. If you refinanced your loans and qualified for a seven-year term at 4% interest, you’d save over $7,300 in interest charges—and pay off your loans three years earlier than originally scheduled. You can use a student loan refinancing calculator to see how much you can save by refinancing your debt.

To get the best rate, shop around and get quotes from multiple student loan refinancing lenders.

Bottom Line

Although private student loan forgiveness isn’t an option, there are a variety of programs that can help you repay your debt. You may also be eligible for alternative payment plans or student loan refinancing to pay off your debt faster. If you’re having trouble with your payments or need help understanding your repayment plan, contact your lender to discuss your options.

Unlike federal student loans, private student loans are funded by private lenders and don’t qualify for student loan forgiveness.

However, there are other options that might help you more easily manage private student loans, such as student loan refinancing.

Can private student loans be forgiven?

Private student loans can’t be forgiven through any government or independent programs. Only federal student loans are eligible for forgiveness under federal programs, laws, and policies.

But some private student loan companies may offer various forms of relief, such as pausing payments temporarily or lowering your monthly interest or payment amount for a brief period. Not every private lender offers relief options, so it’s important to contact your loan servicer directly if you need to discuss your repayment options.

Could President Biden forgive private student loans?

President Joe Biden and other politicians have proposed student loan forgiveness plans for federal student loans — but not for private student loans. If you’ve been crossing your fingers for a private student loan forgiveness COVID-19 relief package, it’s unlikely politicians are considering it.

As for federal student loan forgiveness, how much could potentially be forgiven is still up in the air. Here are the developments so far:

  • From Congress: U.S. Senate Majority Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA), and Rep. Ayanna Pressley (D-MA) are pushing for $50,000 in loan forgiveness per borrower to stimulate the economy and remove a financial burden from those struggling to pay off their student loan balances. They’ve met with the president multiple times, insisting that he broadly consider who will qualify for forgiveness.
  • From the White House: President Biden has backed a more modest cancellation of $10,000 in federal student loan debt per borrower but is facing pressure to cancel that amount and more through executive order. Top White House aides have drafted an order for the cancellation of some student loan debt, but as of this writing, the president has yet to move forward with a decision.

Until a decision is made on how much, if any, student loan debt the government will cancel, it’s unlikely that any private student loan debt will be forgiven. Although some federal student loan debt may be forgiven, that doesn’t mean you should reduce your monthly payments. Your best option is to always pay off your student loans as quickly as possible, whether or not forgiveness may be available in the future.

Keep in mind: It may seem like no progress has been made toward widespread loan forgiveness, but there has been one major development. The American Rescue Plan of 2021 includes the Student Loan Relief Tax Exclusion, which ensures that student loan forgiveness between Jan. 1, 2021, and Dec. 31, 2025, will be tax-free.

Talk to your lender about your options

Private student loan lenders often have programs available for borrowers experiencing financial hardship. These might include temporarily pausing your loan payments, modifying your loan, or exploring private student loan consolidation.

Contacting your lender is usually the best way to see what private student loan repayment options are available to you. Be sure to reach out to your lender before skipping the payments and defaulting on your loans, as this will harm your credit score.

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Reminder

If you have a cosigner, missing payments could hurt their credit, too.

Check Out: Defaulted Student Loans: Can You Refinance?

Refinancing your private student loans could help lower your payments

If you’re not excited about a growing student loan balance while in deferment or forbearance, student loan refinancing might be a good alternative. When you refinance your student loans, you pay off your old student loans with one new loan.

With refinancing, you might be able to qualify for a lower interest rate or lower your monthly payment by extending your repayment term. But keep in mind that a longer repayment period also typically comes with a higher interest rate — which means a higher total cost.

For example: If you have a student loan that will take five years to pay off, extending your repayment term to seven or 10 years should lower your monthly payment.

With a $10,000 balance, a five-year loan at 3.5% APR would require a $182 monthly payment. If you refinanced to a 10-year loan with a higher 4% interest rate, your payments would be only $101 per month.

However, while you’d pay a total of $10,920 with the five-year loan, you’d end up paying $12,120 with the 10-year loan. This means you’d pay about $1,200 more over time to get that lower monthly payment.

Review your federal student loan options

Although private student loans don’t qualify for forgiveness, federal options are available if you have a mix of federal and private student loans. These include income-driven repayment and federal student loan forgiveness programs.

For example: You might be able to lower your monthly payments by signing up for an income-driven repayment (IDR) plan for your federal student loans. By lowering your loan payment through an IDR plan, you could free up some of your monthly cash flow to put toward your private student loans and other bills.

On an income-driven repayment plan, you could have the remainder of your federal student loan balance forgiven after 20 to 25 years of payments, depending on the plan.

The U.S. Department of Education offers four IDR plans:

  • Revised Pay As You Earn (REPAYE): REPAYE is available to almost all federal student loan borrowers. With REPAYE, your payments are capped at 10% of your discretionary income, and your remaining balance is forgiven after 20 or 25 years, depending on whether you have undergraduate or grad school debt.
  • Pay As You Earn (PAYE): You have to demonstrate a partial financial hardship to qualify for PAYE, meaning your payment would be lower on PAYE than on the 10-year Standard Repayment Plan. With PAYE, your payments are capped at 10% of your discretionary income, and any remaining balance is forgiven after 20 years.
  • Income-Based Repayment (IBR): Like the PAYE Plan, you must demonstrate a partial financial hardship to qualify for Income-Based Repayment. This plan limits your payments to 10% or 15% of your discretionary income, depending on when your loans were issued. If you took out your loans before July 1, 2014, they’ll be forgiven after 25 years on IBR. Loans taken out after that date will be forgiven after 20 years.
  • Income-Contingent Repayment (ICR): The ICR Plan is available to student or parent borrowers and limits payments to 20% of your discretionary income. On ICR, any remaining balance is forgiven after 25 years.

1. Contact your lender

The first thing you can do if you’re having a hard time making your private student loan payments is to contact your lender.

Your lender likely doesn’t offer student loan forgiveness for private loans, but it might still offer help in other ways. For example, you might qualify for deferment or forbearance, which temporarily postpone your payments.

You should know, however, that not all lenders offer deferment or forbearance, and those that do have differing guidelines for how long you can postpone your payments. Note, as well, that your interest will continue to accrue while your payments are on hold.

Whatever you do, don’t simply abandon your payments. Defaulting on your student loan can tank your credit score, making it difficult to borrow money in the future. As such, keeping an open line of communication between yourself and your lender could be key.

2. Refinance your student loans

In some cases, refinancing your private student loans could be a boon for your budget. Depending on your creditworthiness, you might qualify for a lower interest rate than what you’re currently paying.

There are even some student loan refinancing lenders who offer additional perks for their members, such as free career coaching and financial planning.

Like all financial decisions, though, there’s no one-size-fits-all approach to refinancing private student loans. Borrowers with lower credit scores or those who didn’t complete their degree may find they have fewer — and less ideal — options than others.

Check out our guide to deciding if refinancing is right for you, and if it is, be sure to shop around with multiple lenders to find the best deal for your situation.

You can also try our student loan refinance calculator to see how much you might save.

3. Explore private student loan repayment assistance programs

Most states offer some form of student loan repayment assistance, such as student loan grants for qualifying professionals.

Many of these programs are aimed at teachers, medical workers and lawyers who are willing to work for a given amount of time in underserved communities. Depending on the program, you can get money to repay your federal or private student loans.

Some programs are based solely on residency, rather than the job you do. The Kansas Rural Opportunity Zones program, for example, pays $15,000 over five years to qualifying borrowers who move to an eligible area in Kansas.

You can find out what’s available where you live or went to school by searching online or contacting your state education agency.

4. Optimize your federal loans (if you have them)

Although you aren’t likely to find a private student loan forgiveness program, there are many repayment options for federal student loans. These can be especially helpful when times get tough.

For instance, let’s say that you’ve had a career change that resulted in reduced income. In that case, an income-driven repayment plan (IDR) for the federal part of your student loan debt could be an excellent solution. An income-driven repayment plan will cap your monthly federal student loan payment based on how much money you make.

In essence, rather than paying off your federal and private loans equally, you could use an IDR to lower your federal student loan payment. Then, you can take those excess funds and put them toward your private student loan, paying more than the monthly minimum amount due.

Since private student loans tend to have higher interest rates than federal ones, this shuffling of funds fits well with the debt avalanche method, which targets high-interest debt first. This approach could save you a significant amount in interest costs over time.

5. Find an employer that offers student loan assistance

This tactic may not apply to everyone, but if you’re open to a new job, you could deliberately seek out companies that help their employees pay off their student loans.

Some companies offer a student loan matching benefit, similar to a 401(k) matching benefit, which can help keep your repayment on track.

6. Pick up a side hustle

If you’re not eligible for a raise, you might consider a side hustle. Some side hustles are more lucrative than others, but when it comes to paying off your student loans, every dollar counts.

For example, imagine your loan balance is $35,000, with an interest rate of 5%. If you have a 10-year loan term, your monthly payment would be $371. Putting just $50 extra a month toward this loan would take nearly a year and a half off of its life, saving $1,500 in interest payments.

Use our payoff calculator to see how much of an impact extra income from a side hustle can have on your student loan.

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