There are two main types of student loans: private student loans and federal student loans. Federal student loans provide funding for attending college or university with money provided by the federal government. Private student loans, on the other hand, provide funding for school from private banks. Both federal and private student loans must be repaid according to the terms of the loan after the borrower graduates or stops attending a higher education institution.
Today, student loan forgiveness is a popular topic of conversation for young borrowers struggling to repay their debts. In some situations, federal student loans can be forgiven in full. It’s more difficult and less common, however, for private student loans to be forgiven. Here, we’ll look at some of the options struggling borrowers have for private student loan forgiveness.
Who Qualifies for Student Loan Forgiveness?
Certain situations allow for the full balance of a student loan to be discharged without the borrower paying all of it. The most common type of forgiveness is for federal student loans and is referred to as Public Service Loan Forgiveness. This repayment option applies to borrowers who have made 120 qualifying monthly payments while employed in specific industries such as:
- Federal government
- Local government
- State government
- Tribal government
- Non-profit organizations
Borrowers who do not qualify for Public Student Loan Forgiveness include those who work for:
- Labor Unions
- For-profit organizations
- Partisan political organizations
This type of forgiveness is not typically offered with private student loans. Borrowers with private student loans may qualify for forgiveness in rare circumstances.
When Can My Private Student Loans Be Forgiven?
The two most common ways a borrower qualifies for student loan forgiveness are if they pass away or become permanently disabled. Companies that offer this type of forgiveness include:
- Sallie Mae
- Citizens Bank
Any borrower who is interested in student loan forgiveness should inquire with their lender regarding repayment options. Each lender approves forgiveness on a case by case basis. Two common reasons lenders approve forgiveness include:
Predatory Lending: Predatory lending is when a lender imposes unfair or abusive loan terms on a borrower.
Lender Unable to Verify Debt: When a student loan is sent to collection, the borrower can request that they verify the origin and balance of the debt. If they’re unable to verify the debt, it may be forgiven.
Unfortunately, not many private loans qualify for forgiveness. As a result, borrowers must look into other repayment options they can use to repay their student loans in full and on time. One of the most common options is debt settlement.
Contact a Trusted Debt Settlement Lawyer Today
When you enrolled in college, you were probably not anticipating having to scrape by to make your loan payments. If you’re suffering under the weight of student loan debt, it’s in your best interest to contact a trusted debt settlement attorney as quickly as possible. A debt settlement attorney is experienced in negotiation and will work in your favor to reduce and eliminate the balance you owe on your student loans.
The attorneys at McCarthy Law PLC are a trusted source of legal representation when it comes to student loan debt settlement. Under our debt settlement program you will only have to pay a fraction of the cost of what you owe on your student loans. If you’re unable to settle your student loans, you might be eligible for refinancing or loan consolidation. To schedule a consultation with a knowledgeable and experienced debt settlement attorney, call our office at 855-976-5777 or fill out an online contact form today.