How to Get Rid of Private Student Loans

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Updated on February 17, 2024

You can get out of private student loan debt by agreeing to a settlement, obtaining a discharge in bankruptcy, filing a lawsuit against the loan holder, or waiting for the debt to expire.

Broad student debt cancellation is a big question mark on the minds of student loan borrowers across the county. Voters want President Joe Biden to follow through on his campaign promise to provide $10,000 student loan forgiveness to each borrower.

But even if that happens, it will likely be targeted at people with federal student loans. It’s unlikely that the forgiveness will help borrowers with private student loan debt.

As the fight for relief continues, you should assume the government won’t be getting rid of your loans. Instead, you may need to take matters into your own hands.

Ahead, learn how to get rid of private student loans.

If you need help with your private loans:

Ways to get rid of private student loans

Negotiate a settlement

Student loan settlement is possible, but it comes at a cost: you and your cosigner’s credit scores will take a hit, and collection fees may be added to the loan balance. You can’t settle a loan that’s in good standing or delinquent. You have to miss payments and be in or near default before your loan holder will agree to settle. You also have to have enough cash to pay the settlement amount in a lump sum or over a few months.

On top of those costs, there are tax implications of settling student loan debt. You may have to pay the IRS taxes on the difference between the settlement amount and the loan balance.

Forgiveness options

Learn More: Student Loan Debt Relief Attorney

Get a discharge in bankruptcy

Bankruptcy might be an option to get rid of private loans. But to get any relief, you have to follow a two-step process:

  • File a Chapter 7 or Chapter 13 bankruptcy.

  • File an adversary proceeding with the court.

The adversary proceeding is a lawsuit where you file a written complaint asking the judge to wipe out your student loan debt. To win, you’ll need to prove one of two things:

Learn More: Can You File Bankruptcy on Student Loans?

File a lawsuit

Lawmakers have passed laws like the Truth In Lending Act, the Consumer Financial Protection Act, and the Fair Debt Collection Practices Act to protect you and other borrowers from financial harm.

If a private lender violates one of these consumer rights laws, you may have the right to file a lawsuit against the company in state or federal court.

But before you rush off to court, keep in mind that lawsuits are expensive. The litigation costs could be more than your current loan balance. Those costs are why consumer rights violations are usually handled collectively with a class-action lawsuit. The cases allow the costs to be shared with thousands of student loan borrowers harmed by the same practices.

The recent Navient lawsuit settlement, which wiped out $1.7 billion in private student debt, is a good example. It took over five years and attorney generals from 39 states to reach that deal.


If you wait long enough, you may be able to get out of paying your private student loan because the time to collect has expired. Each loan you borrowed has a limited period of time built into the contract that the creditor must file a lawsuit against you to recover the debt.

If the creditor or debt collector starts the lawsuit after that legal time limit has passed, the claim may be “barred” because it’s outside the statute of limitations.

Take a copy of your promissory note to an attorney in your state to find out what the statute of limitations is where you live.

Federal loans don’t have a statute of limitations. To get rid of them, you’ll need to pay off the balance in full or qualify for a loan forgiveness option like Public Service Loan Forgiveness or Total and Permanent Disability Discharge. Read more about how to get a copy of a student loan promissory note.

Learn More: Do Student Loans Go Away After 20 Years?

Forgiveness options

Many lenders haven’t created private student loan forgiveness programs — even for borrowers experiencing financial hardship due to covid-19. The few that have, limit the cancellation to situations where the primary borrower dies or become permanently disabled.

If you’re struggling to keep up with your monthly payments, talk to your lender about your option to lower your monthly bill or pause it temporarily. For example, Sallie Mae offers a repayment plan that reduces the interest rate on your loans to give you a more affordable payment for a few months.

But at some point, those programs will end, and you’ll need to explore other options to get a payment you can afford.

Student loan refinancing may be an option if your credit report is free from blemishes and you have enough income to cover your expenses. You can check different repayment terms and interest rates using a free online marketplace tool like

Learn More: Should You Refinance Student Loan Debt?

After the statute of limitations passes

In most states, creditors can still try to collect private loans after the statute of limitations runs out. That means they can try to get you to pay the expired debt by sending you letters or calling you as long as they don’t violate the law by threatening to file a lawsuit.

If they do file a lawsuit against you, a court may still enter a judgment against you if you don’t show up and raise the statute of limitations as a defense.

Before you make a payment, it’s a good idea to speak with a student loan lawyer. They’ll be able to advise you on whether a partial payment will restart the time period and available repayment options.

UP NEXT: When Do Student Loans Go Away?

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