Beautiful, Serious Girl

Are You Having Trouble Making Payments?

I’ve got some bad news for you.

Even though it’s 2016 and you would think that this issue should have been addressed by now, there still remains very little financial assistance for people having trouble making their private student loan payments.

The problem with private student loan debt is that it’s not possible for the Federal Government to impose a comprehensive, universal debt relief program since the loans vary so much from state to state, and from lender to lender.

Private lenders do all sorts of things differently, from their application process to their qualification requirements to their maximum loan amounts, debt to income ratios, payment schedules and interest rates, and while there is some regulation in the industry, the rules on lending terms remain quite flexible.

When lenders are able to specify their own qualification standards, offer different interest rates, different loan terms, etc., and private student loans end up being structured in wildly different ways, it’s virtually impossible to pass any sort of forgiveness or financial assistance laws that will apply equally to everyone, so the Government is reluctant to get involved.

Fortunately, all is not lost, because there are a few private student loan relief programs currently available, and there’s talk about big things to come – including all sorts of potential reforms, forgiveness and other financial assistance and debt relief programs.

If you’ve got private student loan debt and need some assistance with making them more affordable, then here are your current options:

Relief Programs for Private Student Loan Debt

You’ve got a few different options for receiving effective debt relief, but not all of these opportunities are available to every borrower, so you’ll either need to contact one of the student loan consolidation and debt relief companies, or do some research of your own to figure out which of these programs will work for you.

If you do choose to work with a service provider who handles the research and paperwork for you, then I recommend calling the Student Loan Relief Helpline. These people are absolute experts at analyzing your existing debt, finding out how to reduce your payments, as well as how to structure your loans (via consolidation, refinancing or other opportunities) to help you pay it off as quickly as possible. You can reach them by calling 1-866-530-9946.

If you do end up having them do the work for you, there will be a cost associated with the research, preparation and restructuring of your debt, but it’s free to speak to them and you will be able to get some questions answered without having to spend any money, so it’s definitely worth spending 5 minutes on the phone with them.

Here are the relief programs that you should be looking into:

  • Loan Forgiveness Programs
  • Loan Consolidation Programs
  • Loan Refinancing Programs
  • Declaring Bankruptcy (not a true Program, but an option)
  • Defaulting on your Loan (not a true Program, but an option)

Read on for details about how each of these different opportunities can save you tens of thousands of dollars with effective debt relief!

Loan Forgiveness Programs

We hate to be the bearer of bad news on this one, but there’s literally nothing available in the way of Loan Forgiveness for Private Student Loans.

Loan forgiveness programs are incredible opportunities because they allow you to completely walk away from your debt, rather than getting it reduced, restructured, or consolidated, but while there are plenty of forgiveness programs for federal student loans, those of you with private student loan debt don’t qualify for any of them.

Fortunately, loan forgiveness isn’t the only form of debt relief, and you do have other opportunities…

Loan Consolidation Programs

While you probably won’t qualify for any form of loan forgiveness on private student loans, you do have tons of opportunities to streamline your debt with easily accessible Private Student Loan Consolidation Programs.

Loan consolidation companies are available for more than just student loan debt, and they offer an excellent opportunity to those of you having trouble making your loan payments on time, as consolidation allows you to accomplish some impressive financial feats, like:

  • Combining multiple smaller loans from a variety of lenders into a single loan from a single lender (meaning you’ll only have one monthly payment to make, one account to watch, one interest rate to pay attention to, etc.)
  • Reduce your monthly payments, by getting a better interest rate, a longer loan repayment term, or some other structural change to your loan

The biggest downside to loan consolidation programs is that private student loans can’t be consolidated with federal student loans, so if you’ve only got a single private loan, you won’t qualify for any of these programs.

Honestly, it’s not that big of a deal anyway, since if you’ve got federal loans you should be able to save significantly more money on them by checking out one of the many available Federal Student Loan Forgiveness Programs.

Loan Modification Programs

The good news about loan modification programs is that they aren’t just extremely effective, but that they’re also available to virtually anyone with private student loan debt.

Whether you have a terrible interest rate, a loan term that’s far too short or some other financial issue that’s causing you serious trouble with making your monthly student loan repayments, you should be able to get some relief via loan modification.

Loan modification is a simple process, but it requires getting your lender to agree to change the terms of your loan, which they aren’t required to do.

For that reason, it can be difficult to get approvals, but as long as you can prove that you’re facing some serious problems with making your payments, and that you’re in danger of missing payments or even defaulting on the loan, you should be able to get some concessions out of your lender.

The bad news on loan modification is that a lender who doesn’t want to budge won’t have to. If they don’t care that you’re having trouble making payments on time, then you just might be out of luck.

For those of you who are able to extract some concessions from your lender, you can look to saving some serious coin with changes like:

  • Reduced Interest Rates – Always a good thing as this is virtually guaranteed to save you money
  • Loan Forgiveness – Some private student loan lenders will occasionally agree to write off debt
  • A Longer Repayment Schedule – This may not save you money in the long-run, since all it does is extend the time you have to pay back your loan, making you spend even more money on interest over time, but it will reduce your monthly payment amounts in the meantime

To find out what you qualify for, you’ll have to contact either the lender who holds your private student loan debt, or one of the private student loan consolidation companies I mentioned above, and let them know that you’re looking for a way to avoid going into default. Tell them that if you can’t get their help, you’ll be forced to stop making payments, default on your loan or declare bankruptcy.

The first to ask for is whether or not they offer Private Student Loan Refinancing Programs, since that’s almost guaranteed to save you money, both in the short-run and the long-term.

You might want to speak to a lawyer before contacting the lender, because things you say during the negotiation process could come back to bite you later on. Be careful out there!

Declaring Bankruptcy on Your Loan

Before you even consider declaring bankruptcy because of private student loan debt, make sure that you’ve exhausted the other opportunities listed above.

Declaring bankruptcy is time-consuming, complicated, and expensive; it destroys your credit for up to seven years, making it nearly impossible to get an affordable loan of any sort (be it a mortgage, car loan, business loan, etc.) so it should only be done as a last resort.

To make matters worse, Congress also recently passed a law declaring that bankruptcy would no longer automatically discharge student loans, so there’s no guarantee that filing bankruptcy will actually reduce your private student loan debt.

However, with that said, you can Discharge Private Student Loan Debt via Bankruptcy if you can prove in court that your loans have placed you in a situation where you’re facing “undue hardship”, meaning that they’re making it difficult for you to provide basic needs like food, shelter and clothing for yourself and/or your family.

Sounds easy, right? It’s not, and the lenders have a lot more experience in fighting this process than you do, so don’t go down this route unless you really are having trouble meeting basic needs, and only if your private student loans are the main reason why you’re having trouble doing that.

If you’re living in a nice house, driving luxury cars and taking fancy vacations each year, then you aren’t going to win this battle in court.

We would advise speaking with a well-qualified, experienced bankruptcy lawyer before pursuing this as a debt relief strategy.

Defaulting on Your Loan

You really don’t want to do this, but you should know that it’s an option.

Just like any other loan, it is possible to default on your private student loan debt, but you should be aware of the consequences before deciding that this is your best option.

First off, defaulting on a loan will obliterate your credit, in many cases, doing worse things to it than even filing for bankruptcy would lead to.

Second, Defaulting on Private Student Loans provides your lender with a “cause of action” against you for what’s called “breach of contract” (failing to live up to the obligations you agreed to in your original loan terms).

This allows your lender to sue you for defaulting on the loan you took out from them, which could lead to you losing a court case, having your wages garnished, getting a levy placed on your financial assets, or even having a lien attached to any property that you own.

Trust us when we say this – default just isn’t worth it. There’s a reason that private lenders make loan modification and forgiveness programs available to their borrowers; they can save everyone involved a great deal of time and money.

Before you default on your loan, make sure to contact your lender and let them know what’s going on. Tell them how badly you need help, and ask what they can do for you to make your payments more affordable.

In many cases, you’ll find lenders are far more forgiving than you would have initially expected.

What Should I Do?

Unfortunately, it’s impossible for us to answer this question without getting more details about your specific situation.

Every private student loan is different, and every borrower faces different financial problems.

To get some good advice on how you should proceed, you’ll need to consult an expert and get them the information they need to provide you with a well-informed decision. Again, my recommendation if you don’t want to figure it out yourself is to call the Student Loan Relief Helpline at 1-866-530-9946. Their student loan experts know all the ins and outs of private student loan debt law, and they should be able to point you in the right direction, even without signing up for their document preparation or consolidation services.

I am also more than willing to help by answering any questions you have about what would work best for you, so feel free to ask them in the comments section below.

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The more people that visit my site, the more time I can dedicate to writing up useful pieces of content like this, and helping you figure out what to do with your student loan debt.

Thank you for visiting my site, and thank you so much for your support. I really do appreciate it!


Tim's experience battling crushing student loan debt led him to create the website Forget Student Loan Debt, where he offers advice on dealing with excessive student loans and advocates a cautious approach to funding education costs via borrowed money.