There are different federal relief programs that offer partial or complete student loan forgiveness, but unfortunately, not everyone will qualify. Those with private student loans that are not tied to the federal government may find it harder to receive relief when they are struggling to make on-time payments. Are there options for those struggling with loan repayment if they have private student loans? The answer is yes; there may be options to relieve the burden of payments.

Forbearance or Deferment

Available for both private and federal loans, some borrowers may be eligible for a forbearance or deferment plan. Both are a form of pausing current loan payments for a specified amount of time, allowing the borrower to get temporary relief, such as during times of financial hardship. However, there are some differences.

Forbearance for private lenders is different than federal forbearance options. However, forbearance may be extended while the borrower is in school, in an internship, or taking part in a medical residency. Borrowers may be able to make interest-only payments while still in school, and some lenders do offer a six-month grace period upon graduation. This grace period allows the borrower time to job search and start their career. Often, lenders may permit a forbearance if the borrower is unemployed or struggles to make payments. Active-duty military personnel and those affected by natural disasters may also qualify for forbearance.

Deferment for student loans is a specified period of time in which the borrower does not have to pay interest or principal on their loan. For example, lenders may grant deferment while the student is in school or until a period after graduation when the borrower has had a chance to obtain gainful employment. Lenders also have the discretion to grant deferments for financial hardship. However, interest may or may not accrue, so borrowers should be aware of their loan terms when requesting deferment.

Repayment Assistance

Many employees and government agencies offer repayment assistance. Federal and state government programs are available that provide repayment assistance for individuals that work in healthcare, education, public defense, are in the military, or other specific industries. Many of the federal programs may only be available for federal loans, so it is essential to do due diligence in research. However, many private employers include student loan repayment assistance as an employee benefit. If considering taking advantage of this employee benefit, it’s important to recognize that you may be committed to working for the company or within a specific role for a designated amount of time.

Refinance the Loan

Refinancing a private student loan may be an option for some borrowers, especially if they have good credit and a solid, reliable annual income. During a refinance, a borrower may be able to secure a lower interest rate, a lower monthly payment, or even both. The repayment terms often range from five to 20 years, giving borrowers flexibility with their repayment schedule. If a lower interest rate is offered, a borrower could save hundreds or thousands of dollars in interest over the term of their loan.

Have a Plan for Your Student Loans

Each borrower has different circumstances, which means that the best way to pay off student loans or seek relief will be unique to their situation. The best thing one can do is research their options in order to make an informed decision about the best approach. In the meantime, continue to make regular, on-time payments on student loans to avoid late charges and build credit. Having a good credit history goes a long way for future financial needs and can make it easier to choose specific options.