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Private Student Loan Forgiveness Alternatives

Private student loan forgiveness isn’t available, but you have other options depending on your lender — including deferment, forbearance, or refinancing.

Eric Rosenberg Eric Rosenberg Updated April 13, 2021

Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."

Unlike federal student loans, private student loans don’t qualify for student loan forgiveness programs.

However, although private student loan forgiveness isn’t available, you might still have other options if you’re struggling to keep up with your student loans.

Here are some alternatives to private student loan forgiveness (and other situations to keep in mind):

  • Talk to your lender about your options
  • Refinancing your private student loans could help lower your payments
  • Review your federal student loan options
  • Check out loan repayment assistance programs
  • Declaring bankruptcy may not dismiss your student loans
  • Private student loan forgiveness doesn’t exist, but there are options

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 for you. Be sure to reach out to your lender before skipping payments and defaulting on your loans, as this will harm your credit score.

Keep in mind that if you have a cosigner, missing payments could hurt their credit, too.

Tip: Some lenders might also be willing to offer a loan modification, which could include options for making interest-only payments or reducing your interest rate for a short amount of time.

While loan modification won’t wipe out your balance, it could help alleviate some of the strain from your monthly payments temporarily. Contact your lender to find out if this is an option for you.

Learn More: Student Loan Forgiveness Scams to Avoid

Deferment

Student loan deferment allows you to temporarily pause your loan payments. Keep in mind that interest still accrues while your loans are deferred, so your balance will grow until you start making payments again.

Here are Credible’s student loan lending partners that offer deferment:

LenderDeferment types availableDeferment length
ascent
  • Active duty military
  • In-school
  • Medical residency
  • Internship
  • Clerkship
  • Fellowship
  • Active duty military: Up to 36 months
  • In-school: Up to 48 months
  • Medical residency: Up to 48 months
  • Internship: Up to 48 months
  • Clerkship: Up to 48 months
  • Fellowship: Up to 48 months
citizensIn-schoolUntil 6 months after leaving school or dropping below half time
collegeaveIn-schoolWhile enrolled in school at least half time
edvestinuIn-schoolWhile enrolled in school at least half time
investedIn-schoolUntil 6 months after leaving school or dropping below half time
mefaIn-schoolUntil 6 months after leaving school or dropping below half time
  • In-school
  • Internship
  • Clerkship
  • Fellowship
  • Medical residency
  • In-school: Up to 48 months
  • Internship: Up to 48 or 60 months (depending on loan type)
  • Clerkship: Up to 48 or 60 months (depending on loan type)
  • Fellowship: Up to 48 or 60 months (depending on loan type)
  • Medical residency: Up to 48 or 60 months (depending on loan type)
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Forbearance

Student loan forbearance lets you temporarily pause payments if you’re experiencing financial hardship. For example, if you lose your job, have excessive debt payments, or are severely ill, you might be able to enter into forbearance to stop your payments for the time being.

If you’re considering deferment vs. forbearance, keep in mind that interest will still accrue during forbearance periods like it does with deferment.

Here are Credible’s lending partners that offer forbearance programs:

LenderForbearance types availableForbearance length
ascent
  • Temporary hardship
  • Admin
  • Natural disaster / declared emergency
  • Temporary hardship: 1-3 months (maximum of 24 months during the life of the loan)
  • Admin: Up to the lender
  • Natural disaster / declared emergency: Up to 3 months
citizensEconomic hardshipUp to 12 months
edvestinuEconomic hardshipUp to the lender
mefa
  • Unemployed
  • Economic hardship
  • Temporary hardship
  • Natural disaster
  • Military deployment
Up to the lender
Economic hardshipUp to 12 months over the life of the loan
(Up to 3 months at a time)
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Learn More: How to Get Student Loan Repayment Help

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.

Enter your current and new loan information into the student loan refinancing calculator below, and see how much you can save by refinancing your student loans.

Step 1. Enter your loan balance

? Enter the remaining amount of the loans you’d like to refinance $

Step 2. Enter current loan information

? Enter the average annual interest rate of the loans you’d like to refinance %
? Enter the monthly amount you currently pay on your loans (or enter remaining term) $
? Enter the amount of time left to repay your loan (or enter monthly payment) years

Step 3. Enter your new loan information to start calculating your savings

? Enter an estimated new interest rate. %
? Enter the monthly amount to pay on your new loan (or enter new loan term) $
? Enter the amount of time you have to repay your loan (or enter monthly payment) years
Lifetime Savings Increased Lifetime Cost $
New Monthly Payment $
Monthly Savings Increased Monthly Cost $

If you refinance your student loan at % interest rate, you can save will pay an additional $ monthly and pay off your loan by . The total cost of the new loan will be $.


Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.

Check Personalized Rates

Checking rates won’t affect your credit score.

LenderFixed rates from (APR)Variable rates from (APR)
advantage education loan consolidation4.54%+N/A
brazos student loan refinancing2.95%+1.89%+
citizens student loans2.89%+¹ 2.19%+¹
college ave student loans3.34%+23.24%+2
elfi student loans2.79%+32.39%+3
mefa refinancing3.47%+42.47%+4
invested refinancing3.05%+3.05%+
penfed purefy student loan consolidation2.99%+2.15%+
rhode island student loan authority refinancing3.19%+N/A
sofi refinancing2.99%+62.85%+6
Compare personalized rates from multiple lenders without affecting your credit score. 100% free!

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All APRs reflect autopay and loyalty discounts where available | 1Citizens Disclosures | 2College Ave Disclosures | 3 ELFI Disclosures | 4INvestEd Disclosures | 5Iowa Student Loan Disclosures | 6SoFi Disclosures

Keep Reading: You Can Refinance Sallie Mae Student Loans — Here’s How

Review your federal student loan options

Although private student loans don’t qualify for forgiveness, there are federal options 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 total 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.

Here are the four IDR plans available:

  • 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 if 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 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 with PAYE, 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 your payments to 20% of your discretionary income. On ICR, any remaining balance is forgiven after 25 years.

Learn More: How to Tell If Refinancing Your Student Loans Is a Good Idea

Check out loan repayment assistance programs

Depending on where you live, you might qualify for a state loan repayment assistance program. These programs sometimes offer assistance for private student loans if you meet the requirements.

For example, you might qualify for a state loan repayment assistance program if you live in California, Florida, or Texas.

It’s a good idea to check whether your state offers such a program to help with private student loans.

Learn More: How Often Can You Refinance Student Loans?

Declaring bankruptcy may not dismiss your student loans

If you declare bankruptcy, you might be able to have some of your debts reduced or forgiven. But this should be a last resort, as it can impact your credit score for up to 10 years.

Even worse, bankruptcies typically exclude student loans unless you’re able to prove an undue hardship, which isn’t all that common.

The bankruptcy process can be expensive, too. You’ll likely have to pay a lawyer and court fees. The total cost could be thousands of dollars, depending on your specific circumstances and which type of bankruptcy you file for.

Disability and death discharge

If you as a student loan borrower were to become permanently disabled, you might be able to have your remaining student loan balance discharged.

And while we especially don’t want to think about this, if you were to pass away, your cosigner might be able to discharge the loan.

For private student loans, death and disability discharges are at the discretion of the lender. For example, Sallie Mae and College Ave both provide disability and death discharges.

How does student loan discharge affect a cosigner? If a student loan is discharged, it will likely be listed as “discharged” on the cosigner’s credit report.

Depending on the status of the loan before it was discharged, this might negatively impact their credit score.

In this case, it might be a good idea for the cosigner to speak with a financial expert before moving forward with a discharge.

Learn More: How to Refinance Student Loans With Bad Credit

Private student loan forgiveness doesn’t exist, but there are options

Private student loan forgiveness isn’t available, but that doesn’t mean you should ignore your student loans if you’re having trouble paying. Contacting your lender to see what your options are is a good first step to taking control of your loans.

Another alternative is refinancing your student loans. You might be able to lower your interest rate or monthly payment with refinancing.

If you decide to refinance, be sure to consider as many lenders as possible to get the right loan for you. You can do this easily with Credible — after filling out a single form, you can compare rates from multiple lenders in two minutes.

Find out if refinancing is right for you

  • Compare actual rates, not ballpark estimates – Unlock rates from multiple lenders in about 2 minutes
  • Won’t impact credit score – Checking rates on Credible won’t impact your credit score
  • Data privacy – We don’t sell your information, so you won’t get calls or emails from multiple lenders

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About the author
Eric Rosenberg
Eric Rosenberg

Eric Rosenberg is a Credible expert on personal finance. His work has been featured at Business Insider, Investopedia, The Balance, The Huffington Post, MSN Money, Yahoo Finance, Mint.com and more.

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