Private student loan forgiveness: 7 options

College graduates shoulder an average of $29,400 in student debt according to College Board’s latest report, and private student loans make up approximately 15% of that debt. Managing student loans can be easier with forgiveness options, but borrowers with private student loans generally don’t have access to loan cancellation programs.

The good news is you still have options. Consider these alternatives to private student loan forgiveness if you’re struggling to repay your debt.

Can I get private student loan forgiveness?

Federal student loan borrowers can access a handful of forgiveness programs if they meet certain requirements. But private student loans are funded by non-federal sources like online lenders, banks, credit unions, and schools. Since these are outside the federal student loan system, they are ineligible for federal loan forgiveness.

Some private lenders will discharge a private education loan in limited situations, such as if the primary borrower dies or becomes permanently disabled. However, policies vary by lender and companies have no legal obligation to cancel debt in these scenarios.

7 options for private student loan relief

While private student loan forgiveness isn't an option, there are other repayment options that can help make your debt more manageable.

1. Contact your lender

Best for: Anyone struggling to make their monthly student loan payments

Maintaining communication with your private student loan lender can potentially unlock options that you might not otherwise have known about. If you're having trouble affording your private loans, explain your situation and ask about how you can keep your loan in good standing. Your student loan servicer might be able to offer a temporary repayment plan arrangement that's uniquely tailored to your needs.

2. Defer or forbear your loans

Best for: Borrowers experiencing temporary financial hardship

Student loan deferment or forbearance is a short-term program in partnership with your lender. It temporarily pauses your monthly payment requirement so you have breathing room when faced with an unplanned hardship, like undergoing a costly health treatment or unexpected unemployment. Plus, it doesn't lower your credit score.

Interest typically continues to accrue during this period, so your loan balance can grow while payments are paused. Not all private lenders offer deferment or forbearance, and those that do have varying terms and qualifications to participate.

2. Explore loan repayment assistance programs

Best for: Borrowers with professions in medicine, nursing, mental health, education, and law.

Loan repayment assistance programs (LRAPs) are offered in certain professions at the federal and state level. You typically must meet certain loan and employment requirements, and agree to a service obligation period. Common occupations that can access LRAPs include doctors, nurses, mental health providers, teachers, lawyers, and more.

For example, the Nurse Corps Loan Repayment Program is administered by the Health Resources & Services Administration (HRSA). If you agree to a two-year service commitment in a high-need area, the organization will pay 60% of your unpaid student debt, including private loans. You might also be eligible to extend your service for a third year in exchange for an additional 25% in assistance.

To see if you might qualify for these types of programs, contact your employer, professional organization, or state licensing agency for more information.

4. Find a location-based assistance program

Best for: Borrowers willing to relocate in exchange for relief

State-sponsored relocation incentive programs can also help you pay down your private student loan debt. If you're looking for a change of scenery and are willing to move, some states offer significant assistance to welcome you. Here are some examples:

• Ascend West Virginia program: Provides $12,000 to remote workers who move to the state - you'll receive $10,000 after your first year, and $2,000 for your second year. Participants also receive perks, like free access to a coworking space, free rental gear for outdoor activities, and more.
• Maryland SmartBuy program: Maryland SmartBuy offers first-time homebuyers 15% of their home purchase price (up to $20,000) to use towards paying off outstanding federal or private student loan debt.
• Tulsa Remote: The Tulsa Remote program offers remote workers a $10,000 grant for relocating to Tulsa, Oklahoma. These funds can be used towards your educational debt

Before choosing a place to settle in, contact the state or county via their website to see if it offers a relocation assistance program.

5. Ask your employer about repayment benefits

Best for: Borrowers who work for an employer that offers a repayment assistance program

An increasing number of employers have started to offer their own student loan repayment benefits to eligible employees. Policies vary - some employers will match a portion of your monthly payment while others offer a certain percentage up to a particular dollar amount.

For example, Google matches their employees' annual student loan payments up to $2,500. And PricewaterhouseCoopers (PwC) has a student loan paydown benefit that gives employees up to $1,200 per year to help lower their student debt.

Ask your employer if it offers a loan repayment assistance benefit. If it doesn't, see whether it's willing to pilot a program to help employees pay down their student loans.

6. Lower your interest rate by refinancing

Best for: Borrowers with strong a strong credit score and stable income

Private student loan refinancing can help you access a lower interest rate or loan terms that are a better fit for your current finances. By opting for a student loan refinance, you combine your existing private student loans with higher interest rates into one new private loan.

If your newly refinanced loan offers better terms, it might help you better manage your education debt. For example, you might lock in a lower interest rate to pay less on your debt in the long run, or get an extended term to reduce your monthly payment. Refinancing, however, generally requires strong credit or a cosigner with good-to-excellent credit on the loan agreement.

Related: Should I refinance my student loans?

7. Use 529 funds

Best for: Borrowers who have or can open a 529 college savings plan

If you used a 529 plan to pay for some of your education, any remaining funds in the account could help you chip away at your student loan balance. 529 plans are tax advantaged savings accounts typically used by parents to pay for a student’s qualified education expenses. But if you have leftover 529 savings and have left school, you can apply up to $10,000 toward paying down your private student loans.

Private student loan forgiveness FAQ

Can I discharge student loans in bankruptcy?

Maybe. Depending on your situation, discharging private student loans in bankruptcy might require extra steps. You often must prove that repaying the debt would cause undue hardship. Additionally, you must undergo a separate adversary proceeding within your bankruptcy case. Consult with a lawyer before trying to discharge student loans in bankruptcy.

Will Biden forgive private student loans?

No. The Biden administration’s student loan forgiveness plan only included federal student loans, but it was later struck down by the Supreme Court and never enacted. Private education loans don’t qualify for loan forgiveness programs or income-driven repayment plans.

Can I convert my private student loans to federal?

There’s no way to convert a student loan that originated from a private lender into a federal student loan. However, transferring federal loans into a private loan is possible through student loan refinancing. Note that refinancing federal student loans means you’ll lose access to all federal protections, including income-driven forgiveness programs.

Do private student loans go away after 7 years?

No. As a private student loan borrower, you’re liable for repaying your debt. However, state rules determine how long a lender or collector can sue you to collect on a delinquent or defaulted debt. This is called the statute of limitations, and how long it lasts depends on the state you live in, the type of debt you owe, and which state laws are named in your credit agreement.

Why is there no forgiveness for private student loans?

The federal government issues different types of student loans for different reasons than private lenders do. While the government aims to make higher education more accessible, it also incentivizes public service by offering loan forgiveness programs to borrowers who work critical jobs in high-need areas.

Private student lenders, like most businesses, offer a service in order to turn a profit. Lenders provide money to borrowers in exchange for interest fees, and forgiving loans would lead to lost profits for these companies. While forgiveness isn’t on the table, other alternatives might help make your private education debt more affordable.