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

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

If you’re struggling with your student debt, you may be wondering if canceling a private student loan is an option. Unfortunately, private loans are not eligible for most forgiveness programs. However, there may be other sources of private student loan assistance.

Can private student loans be forgiven?

When it comes to student debt, you either have federal loans or private loans. Federal loans are issued by the US Department of Education, while private student loans come from banks, credit unions, or online lenders. This difference is why private student loan forgiveness is so inaccessible.

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

The only cases where private student loans can currently be forgiven are in the event of death or permanent disability, but even in these cases the release generally depends on your lender’s policy.

5 ways to get help with a private student loan

Although private student loan forgiveness is not 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-Focused Student Loan Repayment Programs

Although federal employment-based rebate programs are not available to private borrowers, you may be eligible for career-based repayment assistance programs. These programs are usually run by state governments or professional associations and repay a portion of your loans in return for a commitment to work in a high-needs area.

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

  • Nurse Corps Loan Repayment Program. Under this program, you can repay up to 85% of your loans if you are a registered nurse, an advanced practice registered nurse or a nurse faculty member. To qualify, you must commit to working at a designated critical shortage facility.
  • New York State Teacher Loan Remission. If you’re a teacher in New York City and employed in an elementary or secondary school, you may be eligible for student loan repayment assistance of up to $20,000. According to the rules of the program, you must agree to teach in an area that is difficult to staff or to teach a subject that is in great need.
  • Florida Law Society Loan Repayment Assistance. This program provides assistance in the form of a student loan to lawyers employed by legal aid organizations that receive grants. Under the program, eligible lawyers 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 national education agency or professional association.

2. Location-Based Reimbursement Assistance

If you are ready to move to another area, you may be able to get help paying off your private or federal loans. Some states and counties offer special incentives to encourage people to move to certain locations. For example:

  • Kansas Rural Opportunity ZonesPeople moving to designated rural areas of Kansas can receive up to $15,000 in state student loan repayment assistance. In addition, you can also benefit from an income tax exemption, which makes the move even more advantageous.
  • Maine Opportunity. College graduates who attended a school in Maine and decide to live and work in the state can get their student loan payments back through income tax credits, up to an annual maximum.
  • Maryland SmartBuy. The Maryland SmartBuy program helps borrowers pay off student debt and become homeowners. Through the program, eligible applicants can get up to 15% of the purchase price of their home to pay off their student loan (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 who offers student loan repayment

A growing number of employers are helping their employees repay their student loans. Big companies like Estée Lauder, SoFi, and Hulu will pay off some of your student loans as an added benefit, up to an annual or lifetime maximum. Speak to your human resources department to find out if your company has a student loan assistance program.

4. Contact your lender

If you are having difficulty with your payments, contact your lender. Even though private student loans are not eligible for loan forgiveness or income-contingent repayment (IDR) plans, lenders often have their own programs to help borrowers avoid bad debts or defaults.

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

  • College Avenue. College Ave borrowers may be eligible for up to 12 months of forbearance.
  • Sally Mae. Sallie Mae is allowing certain borrowers to defer payments if they return to school or complete an internship or residency.
  • Rhode Island Student Loan Authority (RISLA). RISLA, which lends to borrowers nationwide, is one of the only private lenders to offer an income-contingent 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 helpful strategy. Depending on your credit score and debt-to-income ratio (DTI), you may qualify for a loan at a lower rate than you currently have, helping you save money and pay off your student loans longer. rapidly.

For example, let’s say you had $40,000 in student loans at 6% interest and a repayment term of 10 years. If you refinance your loans and qualify for a seven-year term at 4% interest, you’ll save over $7,300 in interest charges and pay off your loans three years earlier than originally scheduled. You can use a student loan refinance 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 refinance lenders.


Although canceling a private student loan is not an option, there are a variety of programs that can help you pay off your debt. You may also qualify for alternative payment plans or student loan refinance 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.

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