The 8 Best Alternatives to Private Student Loan Forgiveness

Federal student loan borrowers have multiple pathways to seek forgiveness for education debt. Private student loan forgiveness, meanwhile, is rare. Lenders that forgive private student loans may do so only if the borrower becomes permanently disabled or dies. 

If you can’t get private loans forgiven, the next best move is finding ways to make the debt more manageable. Let’s look at the best private student loan forgiveness alternatives. 

8 best alternatives to private student loan forgiveness 

How you approach managing private student debt when you don’t qualify for loan forgiveness can depend on the specifics of your situation. As you weigh each of the following options, consider your goals and what type of help you need most with your loans. Click each option in the list below to learn more details.

Consolidate your private loans

You might consolidate private student loans if your primary goal is streamlining monthly payments. When you consolidate, you take out a new loan to pay off existing loans; you then have one payment to make to a lender going forward. 

You could consolidate just private student loans, or combine them with federal loans. Consolidating federal student loans with private loans means you’ll lose access to federal benefits, like deferment and forbearance programs and income-driven repayment plans. 

Refinance for a lower interest rate

What is student loan refinancing? It’s similar to consolidation since you’re getting a new loan to pay off existing debt, but the main purpose is usually to get a lower interest rate. Reducing your rate can save money on interest charges over the life of the loan. 

Comparing the best student loan refinance companies can help you see what kind of loan options you might have and what rates you could qualify for. You might consider refinancing with a cosigner if you have less-than-perfect credit. Your cosigner’s good credit could help you snag a lower rate. 

Seek employer assistance programs

Your workplace may offer help with private student loan repayment. Employer student loan repayment benefits may include direct payments to your lender or cash payments to you that you can apply to your loans. Either way, any amount of help you could get reduces what you have to spend out of pocket to pay your loans. 

You can talk to your employer’s human resources department or benefits coordinator to learn what student loan perks you may have access to, if any. 

Use debt relief services wisely

Debt relief allows you to get out of debt without paying in full by negotiating settlements with your creditors. Some companies help negotiate debt relief for private student loans on behalf of borrowers struggling to pay what they owe. 

It’s important to research debt relief companies carefully to find a reputable organization to work with. Also, consider what impact debt relief may have on your credit scores. 

Look into temporary forbearance or deferment

Some lenders offer temporary forbearance or deferment benefits for private student loans. These programs allow you to take a short-term break from making payments to your loans.

You can talk to your lender about whether forbearance or deferment is available and how to qualify. It’s also helpful to ask if interest will continue to accrue on your loan balance during your payment pause. 

Explore flexible repayment options from your lender

One of the advantages of private student loans is that many lenders offer flexible repayment. For example, you might be able to hold off on making payments while you’re enrolled in school. That could give your budget some breathing room if you’re not earning a full-time income yet and don’t have much money to spare for loan repayment. 

Lenders can also offer interest-only payments, extended repayment terms, or temporary rate reductions if you’re experiencing financial hardship. Any of those options could give you some relief if your private loans feel overwhelming. 

Consider budgeting tools to maximize savings

Deciding where student loan repayment fits into your budget is key to managing the debt. A budget is a plan for how you’ll spend the money that you bring in each month. If you’ve never made a budget before, there are online tools that make the process easier. 

Using student loan apps can help you track your income and expenses, as well as what you repay to your loans. Some of these apps also offer tips on paying your private loans off faster to save money on interest. 

Look for job-specific repayment programs

Your career path may open up options for private student loan forgiveness. For example, if you’re interested in the healthcare field, several programs offer physician assistant loan repayment. You could also look into teacher student loan forgiveness if you’re working toward a degree in education. 

Note that these programs may limit how much help you can receive. There may also be a work requirement you’re expected to meet. With teacher loan forgiveness, for example, you may have to work in a certain school district or geographic area to qualify. 

When clients need help with a strategy to repay their private student loans, we review the interest rate on their loans. If there’s an opportunity to reduce their rate by at least 0.5% to 1%, we look at refinancing options. We also review their budget and where their student loan payment fits in that budget. If needed, we look for ways to reduce spending, increase income, or some combination of the two.

Chloe Moore, CFP®