Private Student Loans

Managing loans from banks, credit unions, and private lenders

Private vs Federal Loans

What You DON'T Get

  • No income-driven repayment plans
  • No federal forgiveness programs
  • Limited deferment/forbearance
  • No subsidized interest

What You CAN Do

  • Refinance for lower rates
  • Negotiate with lender directly
  • Include in bankruptcy (sometimes)
  • Release cosigner after on-time payments

Your Options for Private Loans

1. Refinancing

Replace existing loans with a new loan at a lower rate

Current rates: 5-12% with good credit (720+)
Requirements: Stable income, good credit, low DTI
Best lenders: SoFi, Earnest, Laurel Road, ELFI

2. Modified Payment Plans

Contact your servicer for temporary relief options

  • • Interest-only payments
  • • Graduated repayment
  • • Extended repayment terms
  • • Short-term forbearance

3. Settlement

Negotiate a lump-sum payoff for less than you owe

Usually requires default first. Damages credit severely.

4. Bankruptcy (Difficult)

Private loans CAN be discharged but must prove "undue hardship"

  • • Brunner test in most courts
  • • Must show inability to maintain minimal living standard
  • • Hardship likely to persist
  • • Good faith effort to repay

Major Private Lenders

Sallie Mae

Discover Student Loans

College Ave

Citizens Bank

PNC Bank

SoFi

Earnest

CommonBond

Never Refinance Federal Loans to Private

Once you refinance federal loans with a private lender, you permanently lose:

  • • Income-driven repayment options
  • • Federal forgiveness programs
  • • Generous deferment/forbearance
  • • Death and disability discharge

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