Although there are forgiveness programs for borrowers with federal student loans, forgiveness options are more limited for borrowers with private loans.
However, private student loan borrowers, who collectively owe a total of $144.9 billion in student loan debt, do have other options to make their student loan payments more manageable.
Here’s what to know about private student loan forgiveness and what borrowers can do to get some private student loan relief.
Table of Contents
- What Is Private Student Loan Forgiveness?
- Student Loan Forgiveness Programs and Limitations
- Can Private Student Loans Be Forgiven?
- Why Private Student Loan Forgiveness Is Rare
- Private Student Loan Debt Relief Options
- Alternatives to Private Student Loan Forgiveness
- How to Avoid Private Student Loan Forgiveness Scams
- The Takeaway
- FAQ
Key Points
• Private student loan forgiveness is rare, with limited options compared to federal loans.
• Deferment or forbearance options are typically available for financial hardship, though interest usually accrues during these periods.
• Negotiating with lenders may lead to loan modifications, such as a lower interest rate or extended payment term.
• Employer assistance programs may help with loan repayment, especially in certain professions.
• For some student loan borrowers, refinancing private student loans may result in a lower interest rate or better terms.
What Is Private Student Loan Forgiveness?
There is no formal program called private student loan forgiveness. Private student loans are rarely forgiven unless a borrower dies or becomes permanently disabled.
Private loan borrowers don’t qualify for federal forgiveness programs such as Public Student Loan Forgiveness (PSLF) or Teacher Loan Forgiveness. Those are federal programs that only apply to federal student loans.
Private loans are issued by a private lender like a bank, credit union, or online lender. However, some private lenders may offer options for forgiveness or cancellation of student loan debt in certain circumstances.
Student Loan Forgiveness Programs and Limitations
While federal student loans are eligible for forgiveness, federal forgiveness programs do have some limitations. Borrowers must qualify for the programs and then follow specific repayment plans and rules.
While the Biden administration approved a total of $188.8 billion of student loan forgiveness to 5.3 million federal borrowers while in office, these programs pertained only to federal loans. Private student loan borrowers were not included in any of the relief. Nor do any current federal forgiveness programs apply to private student loans.
Recommended: A Guide to Private Student Loans
Can Private Student Loans Be Forgiven?
Unfortunately, private student loans are rarely forgiven. However, some lenders do offer private student loan relief through student loan deferment or forbearance options for borrowers facing financial hardship. Interest typically accrues during these periods, regardless of whether the borrower is making payments.
Read your loan contract or disclosure statement, which contains information about terms, rates, fees, and penalties. Here, you’ll find information related to any hardship programs offered by the lender. You can also reach out directly and ask about your options.
Whatever you do, don’t miss a payment. Missing student loan payments can result in a number of negative consequences.
Contact your lender immediately if you’re facing a hardship that will prevent you from making payments on time and in full. After a default on a student loan, which can happen quickly, private lenders may hire a collection agency or file a lawsuit.
Why Private Student Loan Forgiveness Is Rare
Private student loan forgiveness is rare because private student loans are issued by private lenders. They are not government-backed programs like federal student loans are.
Private lenders are not legally required to offer forgiveness programs. They also don’t have the income-driven repayment program options that federal student loans do.
However, private lenders may offer tools for borrowers facing economic hardship, such as temporary deferment or forbearance as noted above, lower monthly payments or short-term interest rate reductions, or interest-only payments. Additionally, depending on the lender, some private student loans may be canceled or forgiven if the loan holder dies or becomes totally and permanently disabled.
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Private Student Loan Debt Relief Options
While student loan forgiveness is rarely an option for private student loans, there are ways to get private student loan debt relief. Here is a look at some of the private student loan repayment options.
Refinancing Your Student Loans
When you refinance student loans, the lender will pay off your old loans and issue you a new loan with a new rate and terms and one payment.
Student loan refinancing can offer several benefits. If you have a good credit history and solid income, or a cosigner on the loan, you may be able to qualify for a lower interest rate, reducing your monthly payments and the total interest you pay over the life of the loan.
Or you might be able to lengthen the term of your loan and decrease your monthly payments (although a longer repayment term will usually increase the total interest paid). You can use this student loan refinance calculator to see how refinancing could affect your payment.
You can typically refinance both federal and private loans. You’ll also be given a choice of a fixed or variable rate.
If you are thinking about refinancing your student loans, do your homework:
• Be sure you’re getting the lowest rate possible with terms that fit your short- and long-term needs.
• Find out if there are any fees involved.
• If you plan to refinance any federal student loans, know that doing so will permanently forfeit all federal benefits and protections, including income-driven repayment plans, federal deferment and forbearance options, and forgiveness programs such as Public Service Loan Forgiveness.
• Consider lenders that initially do a soft credit pull before you actually apply with them to refinance your student loan. That way, shopping for interest rates will not affect your credit.
• And finally, keep in mind that you can refinance more than once.
Talk to Your Lender
Speak to your lender about your private student loan repayment options. You aren’t the first (and you won’t be the last) to ask for help, and many private lenders offer some flexibility for borrowers who are financially struggling.
For example, you may be able to negotiate a lower interest rate or a lower payment over a longer term.
Consider a Payment Pause
Some private lenders offer deferment or forbearance, which will allow you to postpone payments.
• Deferment is sometimes available to borrowers who are planning to go back to school or who are entering military service.
• Forbearance is typically available for those who have had an unexpected hardship that makes repayment difficult, such as an illness or a job loss.
Just remember that interest will still accrue during these private loan payment breaks.
Alternatives to Private Student Loan Forgiveness
Even though private student loan forgiveness is rare, there are other ways to manage your student loan debt and make your loans easier to repay. These are some strategies to consider.
Loan Modification and Negotiation
Many private lenders offer some type of loan modification for borrowers who are financially struggling.
As discussed previously, you may be able to negotiate a lower interest rate or a lower payment over a longer term, or set up a period during which you can make interest-only payments.
Be ready to answer questions about why you’ve fallen behind, what other debts you’re paying, and about your income prospects.
Employer Repayment Assistance
Approximately 36% of companies have programs that help borrowers pay back their student loans, according to a 2024 report by the Employee Benefit Research Institute. The amounts and terms vary from company to company, but these employer student loans repayment assistance programs may offer employees a match of up to $5,250 annually on payments they make toward their student loans. (Starting in 2027, the $5,250 amount will be indexed for inflation.) Check with your HR department to find out if your company has such a program.
Also, many states, industries, and professional associations offer student loan repayment assistance for borrowers who are employed in certain professions, including teachers, lawyers, and health care workers. Check with your state and the relevant business or association groups to see what’s available.
Budgeting and Repayment Strategies
Setting up a budget can also help you manage student loan debt. To create a budget, figure out how much income you have coming in each month after taxes. Then, make a list of all your monthly expenses like rent, utilities, groceries, streaming services, clothes, and payments due on credit cards and loans including student loans.
Finally, subtract your expenses from your income to see what’s left, and think about where you can cut back. For instance, maybe you can drop a streaming service or two, or eat out less often.
With the money you save, you can put a little extra toward repayment on your student loans. One way to do this is to put the additional funds directly toward the principal balance of your loan. This can help you reduce the amount of debt you owe, pay off your loans faster, and save you money on interest over time. Tell your lender specifically that the extra payment should go toward the principal.
Another repayment strategy to consider is the avalanche method. With this approach, you put extra money toward the loan with the highest interest rate, while making minimum payments on your other loans. Once that loan is paid off, you direct your extra funds to the loan with the next-highest rate until it’s paid off, and so on until your student loan debt is gone. This method can save you money on interest.
How to Avoid Private Student Loan Forgiveness Scams
It’s important to know that there are a number of student loan forgiveness scams that target borrowers seeking financial relief. Some companies that falsely offer debt relief may try to get you to pay monthly costs or upfront fees, ask for your identification, or promise immediate loan forgiveness.
To help protect yourself, avoid giving out personal information and beware companies that ask for upfront fees or promise guaranteed forgiveness. Also, make sure you choose a reputable lender when taking out student loans.
If you think you’re the victim of a student loan forgiveness scam, report it to the Federal Trade Commission.
The Takeaway
Private student loan forgiveness is rare, but private student loan borrowers do have options to help deal with their debt. For example, they may be able to work with their lender to modify their loan, refinance to get a better rate if they qualify, or get repayment assistance from their employer.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
Can private student loans be forgiven?
Private student loans are rarely forgiven because, unlike federal student loans, they are issued by private lenders rather than the federal government. Private lenders are not legally required to offer forgiveness programs. However, some private lenders may offer other debt-relief options for borrowers facing economic hardship.
What options are available if you can’t repay private student loans?
If you can’t repay your private student loans, contact your lender right away, before you miss a payment. They may offer options such as a temporary payment pause through deferment or forbearance, or loan modifications such as a lower interest rate, a lower payment over a longer term, or interest-only payments.
Can refinancing help lower private student loan payments?
Refinancing may help lower your student loan payments if you qualify for a lower interest rate that reduces your monthly payments and the total interest you pay. You might also be able to lengthen the term of your loan to lower your monthly payments. Just be aware that a longer repayment term will usually increase the total amount of interest you pay.
Do private lenders offer hardship programs?
A number of lenders offer hardship programs to student loan borrowers, although it varies by lender. These programs may include a temporary payment pause through deferment or forbearance, interest-only payments, and lower payments over a longer term. Contact your lender to find out what they offer.
Is private student loan forgiveness legitimate?
There is no such thing as an official private student loan forgiveness program. Getting student loans forgiven is very rare. It generally only happens if the borrower dies or becomes totally and permanently disabled. Beware any company that promises forgiveness of private student loans for a fee — it is likely to be a scam. If you are having trouble repaying your private loans, contact your lender directly to find out about any hardship programs they offer.
About the author
Melissa Brock
Melissa Brock is a higher education and personal finance expert with more than a decade of experience writing online content. She spent 12 years in college admission prior to switching to full-time freelance writing and editing. Read full bio.
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