Private Student Loans

Private student loans are very different from federal student loans. Federal loans may offer income-driven repayment plans, Public Service Loan Forgiveness, administrative discharge programs, and other federal protections. Private student loans generally do not offer those same programs. But that does not mean private student-loan borrowers have no options. The right strategy may depend on: - the type of loan; - the promissory note; - who owns the debt; - the interest rate; -

Many borrowers have heard: “Student loans never go away, and there is no statute of limitations.” That statement can be misleading when applied to private student loans. Private student loans can be subject to statutes of limitation. What Is a Statute of Limitations? A statute of limitations sets the time period during which a creditor may file a lawsuit to enforce a debt. For private student loans, the applicable period varies by state and can depend on the loan agreement, p

A borrower may have a private student-loan payment of $800, $1,200, $1,500 or more per month and discover that the lender offers nothing resembling a federal income-driven repayment plan. That is one of the biggest differences between federal and private student loans. Private lenders generally are not required to offer federal income-driven repayment programs. But borrowers may still have options. Start With the Loan Agreement The first step is determining what the lender ac

Sometimes. Private student-loan lenders and debt owners may be willing to negotiate repayment arrangements or accept a settlement for less than the total amount claimed. But borrowers should understand something important: Settlement is not a guaranteed program. There is no federal private-loan settlement formula that requires a lender to accept a particular percentage. Why Would a Lender Settle? A lender or debt owner may decide that accepting an agreed amount is preferable

One of the biggest misconceptions about bankruptcy is that every loan connected to education requires the borrower to prove undue hardship. That is not necessarily true. The first question is whether the particular debt falls within Bankruptcy Code § 523(a)(8). If it does not, the borrower may not have to prove undue hardship at all. Why This Distinction Matters Many unsecured debts are ordinarily discharged in bankruptcy. Certain education debts are treated differently becau

Many borrowers have heard the same statement: “Student loans cannot be discharged in bankruptcy.” That statement is not completely accurate. Private student loans can sometimes be discharged in bankruptcy. The critical question is what type of education debt the borrower actually has. Why the Type of Loan Matters Bankruptcy Code § 523(a)(8) gives special protection to certain education-related debts. If a particular debt falls within one of the protected categories, it genera