Student loans can feel like a financial burden that’s always weighing on you and will never go away. If you’ve felt that, you might find yourself daydreaming some way to snap your fingers and make your student debt disappear.
Getting student loan forgiveness isn’t quite that easy, however, and it can be even trickier for borrowers with private student loans. While student loan forgiveness can provide important relief to borrowers who qualify, private student loans are ineligible for some of the most common and popular options for student loan forgiveness.
The good news is that there are still some student loan assistance programs beyond the options reserved only for federal student loans. Find out if you can get funds to repay your private student loans or qualify for other forms of private student loan help.
How to get private student loan forgiveness and assistance
Even though many of the best-known forgiveness programs don’t include private student loans, you definitely do have some options.
For example, some state and local programs provide repayment assistance that can be used to repay private student loans. Some companies are also jumping in to help their employees pay off student debt.
Here are a few potential sources of private student loan help that are worth exploring.
Loan repayment assistance programs for private student loans
Many federal, state and local government agencies provide or participate in student loan repayment assistance programs (LRAPs) that offer funds to help pay off student debt. Some limit these funds to federal student loans, but others allow you to apply them to private student loans, too.
Check for LRAPs that are offered for residents of your state, members of your profession or alumni of the college you graduated from, and you could find an opportunity to get private student loan forgiveness. You can search for such options with this student LRAP tool from Student Loan Hero, which filters programs by location, occupation, award type and amount. (Note: Student Loan Hero, like MagnifyMoney, is a subsidiary LendingTree.)
As you seek out these programs, make sure you double-check that your private student loans are eligible to be repaid.
Here are some examples of a few such LRAPs that can offer help with private student loans:
- The National Health Service Corps Loan Repayment Program offers repayment assistance to health professionals as nontaxable funds, which may be applied to either federal or private student loans. The program awards up to $50,000 for a two-year, full-time commitment ($25,000 for part-time) providing physical or mental health services in designated high-need areas.
- The Teach Iowa Scholar Program provides $4,000 per year for up to five years (for a $20,000 total) to teachers working in Iowa’s designated shortage areas. These funds can either be applied to a federal student loan or paid out to the recipient, after which they could be used toward private student loan repayment.
- The Alfond Leaders student debt reduction program helps science, technology, engineering and math (STEM) professionals in Maine. Qualifying STEM workers can apply to get up to half their student loans repaid, including private student loans, up to a total of $60,000.
- The Teach NYC Loan Forgiveness Program offers to repay up to $24,000 over six years for teachers who work in one of New York’s assigned shortage areas. The program repays the lesser of $4,000 or one-sixth of the recipient’s total outstanding student loans, including private student loans, for each year of service.
- The University of Colorado offers student loan assistance or forgiveness for graduates of these law schools who work in public service. Awards are calculated on an individual basis and can range from 15%-75% of your monthly student loan payments, for up to five years.
Employment benefits for student loans
These student LRAPs are not the only options to get help with your private student loans. Even if you don’t qualify for private student loan forgiveness, you might still be able to find extra funding to repay your college debt faster.
One way to do this is by working in an occupation that comes with its own LRAPs. A sizeable number of LRAPs are tied to specific types of employment, so if you’re in a field where participating in those is possible, explore that option.
But even if an LRAP isn’t a possibility, you can still seek out employers that offer benefits or compensation that will help you tackle your student debt.
Here are some key benefits to look for that can help you repay private student loans:
- Student loan repayment plans are becoming a more common and popular benefit in employers’ compensation packages. These student loan benefits usually match student loan payments made by the worker, capped at a certain dollar amount each year or month. The matched funds might be paid directly to the lender, or provided to the employee as additional compensation.
- Higher base pay will also help you repay student debt faster. If you’re bringing home more money each month, you might have extra funds available to repay your private student loans. That’s why it’s vital for job seekers with student debt to apply to high-paying positions and negotiate for a higher salary if they receive an offer. If you’re already employed, you can speak with your supervisor about how you can earn a pay raise in the next year.
- Sign-on bonuses can also be a great source of funds to make an extra, lump-sum payment toward private student loans. Depending on the industry you work in and the demand for workers with your skills, you might be able to get a signing bonus when starting a new job. This is a common perk for doctors and lawyers, for example. But with 23% of employers offering sign-on bonuses in 2018, according to The Society for Human Resource Management, it’s worth considering negotiating such a bonus when you receive a job offer.
If you keep your private student loans in mind when evaluating your current job or a new job, you can target job growth opportunities that will get you benefits to help repay student debt.
Other ways to get private student loan assistance
Getting private student loan help from an employer or LRAP might not be an option for everyone. And if you’re struggling with payments on your private student loans, you may need help now — not when you satisfy an LRAP’s requirements or find a new job.
If you’re looking for more immediate help, there are some steps you can take to tackle your debt when private student loan forgiveness or LRAPs aren’t an option. Here are some other strategies to consider as you work to more effectively manage your private student loans.
1. Work with your private lender
Private lenders don’t have to offer the same protections and benefits that come with federal student loans — you won’t be able to get deferment under federal guidelines or enroll in an income-driven repayment plan, for instance.
However, many lenders will work with borrowers struggling with private student loans. Reach out to your lender to discuss your situation and see what your options are. You might be able to adjust your payment due date, for example. Skipping a payment or pausing payments might also be an option for borrowers who run into financial hardship, such as a job loss.
2. Use federal student loan benefits
If you have both private and federal student loans, make sure you don’t overlook the options available to help with the federal side of your student debt.
Federal student loans come with many benefits and protections designed to help borrowers keep their debt repayment on track — and out of default. You can switch to several different repayment plans, including income-driven repayment designed to be affordable based on your income, local costs and family size. You can also apply to forbear or defer federal student loans.
Lastly, don’t overlook student loan forgiveness programs that are offered specifically to repay federal debt. One can access federal student loan forgiveness through programs such as Public Service Loan Forgiveness (PSLF), the Teacher Loan Forgiveness program, and forgiveness granted through income-driven repayment plans.
3. Consider refinancing student loans
Borrowers don’t have to be stuck paying off a private student loan with unfavorable terms or from a lender they hate. You can refinance student loans with another private lender, instead, taking out a new loan to replace the previous private student loan.
Refinancing private student loans puts you back in control of your debt. You might be able to refinance to a lower student loan rate, which can cut interest costs and monthly payments. You can also choose a new loan term that better fits your needs, such as a longer repayment period that could help lower monthly payments.
Just keep in mind that you’ll need good-to-excellent credit — or a cosigner with excellent credit — to get approved to refinance student loans and receive favorable rates. It’s also wise to shop around and compare different student loan refinance offers, so you know your final pick offers the best deal.
4. Target private student loans first
Prepaying your student loans can be a smart move to get out of debt faster and save on interest charges. If you pay extra toward your student debt, beyond just the minimum, you’re likely better off targeting your private student loans first.
This is because private student loans offer fewer options and protections for borrowers than federal student loans do, making the former riskier to keep around. Plus, paying down private debt first could also produce bigger savings, since this type of student loan often (but not always) has higher interest rates than what you’d pay on federal student loans.
Take a look at your own collection of student loans and assess the costs and risks of each one. Then, you can make a plan to pay off those student loans one at a time, starting with your highest priority accounts, until you’re debt-free.
Whether you’re able to pay extra toward your debt or are struggling just to keep up with payments, take some time to investigate the many possible solutions and strategies for private student loans.