While the cancellation of private student loans is rarely an option, there are several strategies to ease the financial burden.
Redirect Payments from Federal Loans
If you have both federal and private loans, consider pausing or reducing federal loan payments and reallocating those funds to your private loans. This approach is beneficial for two reasons: private loans often have higher interest rates, and they offer fewer affordable repayment plans. While this will increase your federal loan balance due to accruing interest, you can later benefit from federal repayment plan forgiveness after 240 qualifying payments.
Related: Private Student Loan Repayment Options
Refinancing can be useful if you have high-interest federal loans like Parent PLUS Loans. To qualify for the best rates, you’ll need a strong credit profile and enough income. Use platforms like Credible to compare loan terms across multiple lenders.
Note: Transferring a federal loan to a private lender will disqualify it from Public Service Loan Forgiveness and income-based repayment plans.
Explore Lender-Specific Repayment Plans
Many private loan servicers offer temporary relief options like interest-only payments, deferments, or forbearances. Deferment is generally available if you return to school or serve in the military, while forbearance is an option during financial hardship, such as job loss or medical emergencies.
Related: How to Lower Private Student Loan Payments
You may have other options to lower your monthly bill. Contact your student loan servicer to learn your options.