Can You Get Private Student Loan Forgiveness?

Private student loan forgiveness isn’t possible for most borrowers, but you could get some relief by using other options.

Written by Kat Tretina / May 20, 2022
Reviewed by Mark Kantrowitz

Quick Bites

  • Private student loans aren’t eligible for federal student loan forgiveness programs.
  • Private student loans account for nearly 8% of all education debt.
  • The average interest rate issued on Sallie Mae student loans was 8.42%.[1]
  • Borrowers may qualify for financial hardship programs, alternative repayment plans or student loan refinancing.

If you’re one of the millions of people that took out private student loans, you might feel excluded from the national debate around debt relief.

And rightly so: The majority of federal loan borrowers haven’t had to make payments or worry about interest accruing since March 2020. Plus, over the past year, President Biden’s Department of Education has canceled about $17 billion in federal loans for more than 700,000 borrowers[2]. On top of that, Education Secretary Miguel Cardona told MSNBC in mid-May that the White House was in discussions with the Justice Department about potentially doing even more to forgive government-held debt.

The volume of discussion around private student loan forgiveness has been something closer to crickets.

On the brightside, private student loans can be discharged in extreme and unfortunate circumstances. Keep reading to learn about available options that could reduce your private loan payments or even help you repay your debt faster.

Inside this article

  1. Paying back private loans
  2. When you can get forgiveness
  3. Alternatives to loan forgiveness
  4. Repaying your student loans

Why are private loans hard to repay?

Private student loans are education loans that aren’t issued by the U.S. Department of Education (meaning they aren’t federal loans). They can come from banks, credit unions or online lenders that specialize in student loans.

While federal loans make up the vast majority of the nation’s student loan debt—$1.6 trillion—the number of borrowers with private student loans is increasing. As of 2020, there were over six million borrowers with private student loans, exceeding $140 million in debt.[3]

If you’re one of those borrowers, it’s important to know that there are some major differences between federal and private loans, which can make private loans more difficult to repay. For instance:

Private loans have higher interest rates

Private loans tend to have higher interest rates than federal loans. In 2020, the average interest rate on private loans issued by Sallie Mae—the largest private student loan provider in the country—was 8.42%.

By contrast, interest rates on federal Direct Subsidized and Unsubsidized Loans disbursed between July 1, 2020, and June 30, 2021, was just 2.75%.[4]

Over time, the difference in rates can cause the borrower to pay significantly more in interest charges. Consider these scenarios:

Sarah took out $7,500 in federal loans at 2.75%. Under a 10-year standard repayment plan, her payment was $72 per month. At the end of her loan term, she paid $8,587—only $1,087 in interest accrued.

By contrast, Justin took out $7,500 in private loans. He had a 10-year term and a 8.42% interest rate, so his monthly payment was $93 per month. By the end of his loan term, Justin repaid a total of $$11,120. Due to the higher interest rate, he paid $2,533 more than Sarah.

Federal Direct Unsubsidized Student LoanPrivate Student Loan
Loan Term10 Years10 Years
Interest Rate2.75%8.42%
Minimum Monthly Payment$72$93
Total Interest Paid$1,087$3,620
Total Repayment Amount$8,587$11,120

Private loans have fewer repayment options

Federal loan borrowers have multiple repayment options if they can’t afford their current payments. Federal borrowers can take advantage of income-driven repayment (IDR) plans or loan forgiveness programs.

By contrast, private student loans typically aren’t eligible for those federal programs. Although some private lenders have reduced payment options for borrowers dealing with financial issues, not all do. And private alternative payment plans tend to have shorter durations and stricter requirements than federal options.

Not all private lenders offer forbearance or deferment

If you have federal loans and lose your job or become ill, you can usually postpone your payments for a set period without entering into default. However, private loan borrowers may not have that ability, or their lender may offer more limited durations. Some private lenders have financial hardship programs that allow borrowers to delay their payments, but not all lenders offer that flexibility.[5]

Is there any form of private student loan forgiveness that exists?

With those drawbacks in mind, you may be struggling with your payments or frustrated by how little progress you’ve made paying against the principal. If that’s the case, you may want to exhaust all routes to see if private student loan forgiveness might be out there.

According to Katie Bossler, quality assurance specialist with GreenPath Financial Wellness, a nonprofit credit counseling agency, private student loan forgiveness isn’t available in most situations.

“Private student loans are typically not eligible for most forgiveness programs,” says Bossler. “The only exception when private lenders might forgive the loan balance on student loans is if the borrower dies or becomes permanently disabled.”

Unfortunately, private student loans aren’t eligible for federal forgiveness programs like Public Service Loan Forgiveness (PSLF) or Teacher Loan Forgiveness. And, as we saw with the Coronavirus Aid, Relief, and Economic Security (CARES) Act, private loans weren’t eligible for the COVID-19 relief measures instituted in March 2020.

While many borrowers hope President Biden will issue blanket loan forgiveness, that isn’t likely to happen. Adam Minsky, an attorney specializing in student loan law, says that any future student loan forgiveness measures instituted by President Biden will likely exclude private loans.

“It's unlikely that President Biden could include private student loans in some sort of broad student loan forgiveness initiative through executive action,” says Minsky. “While there is debate about the extent of the President’s authority to cancel student loans through executive action, there is general agreement that only federal loans could be covered, because the applicable federal statutes only govern the federal student loan system.”

Tip: You may receive emails or letters from companies that promise they can get your private student loans forgiven. Private student loan forgiveness doesn’t exist, and any student loan relief available you can get on your own for free, so don’t pay these companies money or hand over your personal information.

5 alternatives to private student loan forgiveness

Since private student loan forgiveness isn’t an option, you’re likely researching ways to repay your loans. If you need help, here are five alternatives to try:

1. Talk to your loan servicer concerning hardship

If you can’t afford your payments because of a change in your situation—say, you lost your job—some lenders have financial hardship programs. If you qualify, you could temporarily make reduced payments or postpone your payments altogether while you get back on your feet.

For example, College Ave student loan borrowers may be eligible for up to 12 months of forbearance over the life of their loans. Hardship forbearance is granted in three- to six-month increments.[6]

“Some private student loan servicers might let borrowers suspend payments temporarily—known as forbearance—due to hardship,” says Bossler. “Interest and penalty fees might continue to accrue, which would increase the loan balance over time, so consider this option carefully.”

Contact your lender as soon as you realize you’re at risk of missing a payment to discuss your options.

2. Look into state loan repayment programs

While private loans aren’t eligible for loan forgiveness, you may be able to get help with your debt through a state loan repayment assistance program (SLRAP). Depending on your location and occupation, you could qualify for money to repay a portion of your debt in exchange for a service commitment in a high-need area. However, make sure you carefully review the program’s requirements.

“Criteria for repayment assistance programs varies depending on the entity that administers the program,” says Minsky. “Some repayment assistance programs are limited to federal student loans only.”

Some programs that repay both federal and private student loans include:

New Hampshire: The New Hampshire Bar Foundation operates a law school loan repayment program for lawyers who practice in the public interest at select New Hampshire legal service organizations. Lawyers must meet program income restrictions to qualify.

North Dakota: Under the North Dakota Healthcare Professional Student Loan Repayment Program, eligible health care professionals can receive up to $150,000 in student loan repayment assistance for five years of service in a high-need area.

Texas: In Texas, public school teachers at the preschool, primary or secondary levels may qualify for the Teach for Texas Loan Repayment Assistance Program. If eligible, teachers can receive up to $2,500 per year in loan repayment assistance.

To find out if you are eligible for a similar program, visit your local state education agency’s website or contact your field’s professional association site.

3. Ask your employer for help

More employers are offering student loan assistance programs as an added benefit for workers. In a 2020 report from the Society of Human Resource Management, 8% of employers offered student loan repayment assistance.[7]

Employer student loan programs usually match your payments, up to an annual maximum. Taking advantage of these programs can help you pay off your debt faster and save on interest charges. Talk to your human resources department to see if your company offers this benefit.

4. Consider student loan refinancing

If you have private student loans with high interest rates, you may be eligible for student loan refinancing. Borrowers with stable incomes and excellent credit may qualify for loans with lower interest rates or longer repayment terms. By refinancing your loans, you could lower your payment, save money or pay off your loans sooner.

“[Refinancing] can sometimes be a good idea if borrowers can get a lower interest rate and more manageable monthly payments,” says Minsky.

However, refinancing isn’t for everyone, so do your homework and review lender policies before making a decision. And if you have federal loans, think twice about refinancing your debt and combining your loans. If you refinance federal loans, you’ll lose access to benefits like income-driven repayment plans and loan forgiveness.[8]

Tip: If you decide to refinance your loans, consider applying with a cosigner to increase your odds of qualifying for a loan and getting a lower interest rate.

5. Apply for disability discharge

Probably the only time private student loan forgiveness may come into play is if you become totally and permanently disabled. If this occurs, some lenders will discharge your loans.[9] The following lenders offer disability discharges:

  • Citizens Bank

  • College Ave

  • CommonBond

  • Discover

  • Earnest

  • Laurel Road

  • Navient

  • RISLA

  • Sallie Mae

  • SoFi

  • Wells Fargo (no longer issuing private student loans)

To qualify, you typically need to submit documentation from a physician, a Social Security Administration notice of award for Social Security Disability Insurance or Supplemental Security Income benefits or service-connected discharge from Veterans Affairs.[10]

Repaying your student loans

Many people ask how to get private student loan forgiveness and are terribly disappointed when they find out it’s not an option. With their high rates and limited repayment options, private student loans can be a significant financial burden.

If you’re having trouble affording your loans, it’s important to explore your options and talk to your lender right away about a possible solution. By taking action, you can avoid falling behind or entering default, and you can make progress toward eliminating your debt.

Article Sources
  1. “Annual Report 2020” (10-k), Sallie Mae, https://www.salliemae.com/investors/shareholder-information/sec-filings.
  2. “Biden-Harris Administration Extends Student Loan Pause Through August 31.” Department of Education. https://www.ed.gov/news/press-releases/biden-harris-administration-extends-student-loan-pause-through-august-31.
  3. Melanie Hanson, “Student Loan Debt Statistics,” Education Data Initiative, https://educationdata.org/student-loan-debt-statistics.
  4. “Federal Interest Rates and Fees,” Office of Federal Student Aid, https://studentaid.gov/understand-aid/types/loans/interest-rates#older-rates.
  5. “How Student Loans Work and How to Avoid Scams,” Federal Trade Commission, https://www.consumer.ftc.gov/articles/how-student-loans-work-and-how-avoid-scams#student.
  6. FAQs, College Ave, https://www.collegeavestudentloans.com/faqs.
  7. “Employee Benefits: 2020 Report,” Society for Human Resource Management, https://shrm-res.cloudinary.com/image/upload/v1629481767/2020%20Employee%20Benefits/Benefits_Report_-_Overall.pdf.
  8. “Should I Refinance or Consolidate My Student Loans?” Consumer Financial Protection Bureau, https://www.consumerfinance.gov/ask-cfpb/should-i-consolidate-refinance-student-loans-en-561.
  9. “Disability and Death,” Student Loan Borrower Assistance Center, https://www.studentloanborrowerassistance.org/loan-cancellation/federal-cancellation/disability-and-death.

About the Authors

Kat Tretina

Kat Tretina

Kat is dedicated to teaching people how to pay down debt, boost their incomes and reduce financial stress. Her work has been published by Reader's Digest, The Huffington Post, Forbes Advisor and more.

Full bio
Mark Kantrowitz

Mark Kantrowitz

Mark Kantrowitz is a nationally-recognized expert on student financial aid, the FAFSA, scholarships, 529 plans and student loans. His mission is to deliver practical information, advice and tools to students and their families so they can make smarter, more informed decisions.

Full bio

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