Private Student Loan Forgiveness Doesn’t Exist, But Try These Alternatives

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.

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.

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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).
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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.

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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.