Private student loan forgiveness does not exist, at least in most cases.
Generally, private loans are difficult to cancel. And there is a reason for that: the federal government does not require private student loan relief. You do not have the same range of forgiveness options as federal student loans.
There are, however, two exceptions: if you become permanently disabled or die. It sounds gruesome, but some private loan lenders will forgive your private student loan balance. Even though there are no formal private student loan relief programs like federal student loans, you can try a few things to make the burden easy.
Let’s go through some of those ways.
1. Talk to Your Loan Lender About Your Alternatives
If you struggle to keep up with your payments, talk with your lender about your options for decreasing your monthly payments. Different loan lenders have various programs to help you manage your loan payments.
Your lender can give you flexible repayment plans that are beneficial, so it is worth the ask. If you do not know how to phrase the request, use the sample letter from Consumer Financial Protection Bureau. The CFPB created the letter to help you ask private lenders to help you lower your payments.
However, according to the executive director of the non-profit Student Debt Crisis, Natalia Abrams, private lenders are not obligated to accept the request. They may be willing to help you find a solution. However, they would want to know why you are struggling to make payments.
2. Lower Your Interest Rate Through Refinancing
As stated earlier, getting a private student loan relief can be challenging to pull off. But you can find ways to get rid of your student debts regardless. For example, if you have good credit, you can get a lower interest rate on your private loans by refinancing.
When you refinance your student loans, you choose a new loan lender to give you a lower interest rate. And that lender will pay off your initial lender. Most loan lenders also select between fixed and variable interest rates.
Fixed interest rates mean that the rate will stay the same throughout your loan life, while variable interest rate changes according to economic market change.
Aside from the two listed ways to tackle your private student loans above, you can also opt for forbearance or deferment. Many private lenders offer such options so that you can temporarily postpone your loan payments.
If you plan to enter the military or go back to school, deferment is ideal. Lenders typically offer forbearance to borrowers struggling to make payments either because they got sick, lost their job, or went through a financial crisis.
If you do not know what to do, it is always advisable to seek counsel from professionals.