Although the Biden-Harris Administration’s plan for widespread student loan forgiveness was ultimately struck down by the Supreme Court in 2023, all has not been lost for the millions of borrowers hoping to have their loans canceled.
Under the Higher Education Act, the administration made changes to existing relief and forgiveness programs to forgive millions of dollars of federal student debt. As of October 2024, 4.8 million student loan borrowers have received debt relief.
That said, student loan forgiveness options may be more limited for borrowers with private loans, who owe an average of $54,921 each.
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.
Student Loan Breaks for Many but Not All
As mentioned above, the Biden administration and the U.S. Department of Education have forgiven a large amount of student loan debt via targeted relief efforts. The administration provided $74 billion to more than one million students through the Public Service Loan Forgiveness program, $28.7 billion to the more than 1.6 million borrowers who were defrauded by their schools or saw them suddenly close, and 16.2 billion for more than half a million individuals who have total and permanent disabilities.
During his term, President Joe Biden announced several other measures for student loan debt relief, including an initiative to forgive up to $20,000 in federal student loans for those who met certain income requirements. However, the Supreme Court deemed that the President didn’t have constitutional power to implement such a plan. Another initiative by the administration, the income-driven repayment plan called Saving on a Valuable Education (SAVE) aimed at helping struggling federal student loan borrowers, was blocked by the courts.
These programs pertained only to federal loans. Private student loan borrowers were not included in any of the relief.
Recommended: A Guide to Private Student Loans
Can Private Student Loans Be Forgiven?
Do lenders forgive private student loans? Unfortunately, that almost never happens.
However, many do offer student loan deferment or forbearance options for private student loan 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. 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 private student loan, which can happen quickly, private lenders may hire a collection agency or file a lawsuit.
Take control of your student loans.
Ditch student loan debt for good.
Private Student Loan Debt Relief Options
Refinancing your student loans 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 (but elongating the repayment term will usually increase the total interest paid). Use this student loan refinancing calculator to see how refinancing could affect your payment.
When you refinance, the lender will pay off your old loans and issue you a new loan with a new rate and terms and with one 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.
• Although student loan refinancing rarely comes with any closing costs, it’s a good idea to find out if there are any fees involved. Keep in mind that you can refinance more than once.
• 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 (PSLF).
• 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.
Recommended: Soft vs Hard Credit Inquiry: What You Need to Know
2. Talk to Your Lender
Speak to your lender about your options to repay your student debt. You aren’t the first (and you won’t be the last) to ask for help, and many private lenders offer some type of loan modification for borrowers who are financially struggling.
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.
Always communicate with your lender to avoid student loan forgiveness scams. Some private companies that falsely offer debt relief may try to get you to pay monthly costs or upfront fees, ask you for your identification, or promise immediate loan forgiveness.
If you think you’re the victim of suspicious activity, contact the Federal Trade Commission.
3. 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.
Interest will still accrue during these private loan payment breaks.
As with federal loans, your employer may assist you with your private loans, especially if your skills are in demand. Also, many industries and professional associations offer student loan repayment assistance for firefighters, teachers, lawyers, and health care workers.
The Takeaway
Private student loan forgiveness is rare and has not been included in any sweeping moves to cancel student loan debt or provide relief. Borrowers of private student loans may be able to refinance and get a better rate or work with their lender if they’re struggling.
SoFi refinances both federal and private student loans. There are no prepayment or late fees. Deferment and forbearance options are available.
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.
SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SOSLR-Q424-035