Help for Private Student Loans: What to Do if You Can’t Pay

Author: Sarah Brady, NFCC

Updated: October 21, 2026

Key Takeaways

Private student loans don’t have the same payment flexibility as federal loans, but help is still available.
Your private student lender may be able to temporarily pause or reduce your payments.
Depending on the circumstances, some borrowers can refinance or settle their private student debt.
An NFCC-certified credit counselor can help you understand your options for managing student loans.

Many private student loan borrowers are struggling to cover their loan payments. In fact, late payments and charge-offs for private student loans have been on the rise since 2020.

You’ve probably heard that there are loan relief options for federal student loans. But did you know help is available for private student loans, too?

If you’re one of the many borrowers struggling with private student loan payments, it’s crucial to know where you can get help. After all, missing just one loan payment can hurt your credit scores, and you can even be sued for the money if you stop paying your loans altogether. Here’s how you can get help to stay on top of the payments.

What is a private student loan?

Private student loans are education loans that you take out from a private lender, such as a bank, a school or a state agency. Unlike federal student loans, they’re not funded by the federal government, so they don’t have as much repayment flexibility. For example, they’re not eligible for federal relief programs like income-driven repayment (IDR).

Here are a few other general ways that private student loans are different from federal loans:

Your first payments may be due while you’re still in school.
Your loan might have a variable interest rate, meaning the rate and monthly payment can increase over time.
Some have a prepayment penalty, or a penalty for paying the loan off ahead of schedule.
Most of these loans have cosigners (94% in 2026), and your cosigner’s credit and finances can be damaged if you miss payments.

What happens if you don’t pay your private student loans?

Missing a payment on your private student loan can have negative consequences for you and your cosigner. Here’s what is likely to happen if you fall behind:

Credit damage: Missed payments can be reported on you and your cosigner’s credit reports, causing your credit scores to drop.
Charge off: Lenders typically charge off your loan, meaning they move the debt to a collection department or sell it to a debt collector, once you’re late by 120 to 180 days.
Legal trouble: If your loan is charged off, you and your cosigner can potentially be sued for the debt and have your wages garnished.
Limited financing: You could have problems getting approved for additional loans to cover your education.

Are there payment relief options for private student loans?

There’s a chance your lender has payment relief options available for your private student loans. Every lender is different, but here are the most common options available:

Forbearance: If you’re facing a temporary financial hardship, such as a loss of employment, you may be eligible to have payments postponed for several months or more. Note that your loan might continue to accrue interest during forbearance.
In-school deferment: Some lenders will “defer” or pause your payments for as long as 48 months if you’re a student, intern, in a fellowship or residency, or you’ve recently graduated. In the first quarter of 2026, 20.66% of private student loans were on in-school deferment, making it the most popular form of relief. As with forbearance, your loan will likely continue to accrue interest while on deferment.
Military deferment or forbearance: If you’re a service member on active duty or you meet other eligibility requirements, you may be able to temporarily pause your payments or make interest-only payments. Thanks to the Servicemembers Civil Relief Act (SCRA) you can also have your interest rate capped at 6% on qualifying debt you took out before your service began.

5 ways to get relief for your private student loans

If you’re struggling to keep up with private student loan payments, you might feel desperate to find a quick solution. But we don’t recommend using other debt accounts, such as credit cards, to pay off the debt. Here’s what you can do instead.

Apply for relief through your private student loan lender

One way to get help for private student loans is to contact your lender and ask about relief programs. Here’s how the process generally works:

Put together a budget: Create a budget to determine how much you can afford to pay. Your lender may also want to see the budget as proof of what’s affordable. If you need help creating a budget, reach out to an NFCC-certified credit counselor.
Contact your lender or loan servicer: Find their contact information by looking at your billing statements, your loan paperwork or by reviewing your credit reports.
Gather the details: Loan relief often has drawbacks, so you’ll need to gather the key details before deciding if you want to apply. Be sure to ask about the following:

How do I submit an application?
Are there sign-up fees?
When will my payment amount change?
How long does the program last?
Will I have to pay extra interest?
How much more will my overall loan repayment cost?
Will my payments increase after the program ends?
Will this change my loan payoff date?
How will this impact my credit scores?

Apply: Follow the lender’s instructions to apply for relief. Depending on the lender, it could take five business days or more to process your application.
Make payments: Keep making your regular payments while waiting for your application to be processed and for your relief program to start. Missing payments can jeopardize your options and hurt your credit scores.

Check your eligibility for loan forgiveness

Private student loans don’t have the same forgiveness options as federal student loans. However, in rare cases, private loans may qualify for forgiveness. Eligible reasons typically include disability, or the death of the primary borrower on a loan you cosigned for.

You can read your loan agreement to find out if forgiveness is available and review the qualifications.

Refinance your private student loans

Another solution could be taking out a new loan to pay off your student debt, also known as a refinance loan. A refinance loan can be an option if you have steady income and your credit is good enough to qualify.

Refinancing can potentially help you in one or both following ways:

Reducing the interest rate on your debt.
Reducing your monthly payments.

To find the best refinance loan, make sure to compare rates, requirements, and the overall cost of repayment, from multiple lenders. You can also increase your chances of qualifying by applying with a cosigner.

Attempt to settle with your lender

If your loan has been charged off or you have no way to continue payments, there’s a chance you can negotiate a settlement with the lender or debt collector. In other words, you can offer a lump-sum payment that’s less than your full balance. Just know that the chance of a lender accepting a settlement offer is slim, especially if you’re still current on the payments.

To try this option, contact the company that owns the debt and begin negotiations. They may be willing to accept anywhere from 60% to 30% of the balance. Before you send any payment, make sure to get the agreement in writing. That way, you have proof that they agreed to the settlement amount, and that your payment settled the debt.

Also note that if you have more than $600 worth of debt forgiven, there’s a chance you’ll have to pay taxes on the cancelled balance.

Consider bankruptcy as a last resort

Many people believe that student loans can’t be included in bankruptcy. The truth is that it’s very difficult, but not impossible. As a filer, you may have to take extra steps to have the loans discharged, potentially including the following:

Going through an “adversary proceeding” within your bankruptcy case, where you sue the lender to include their loans.
Proving that the loans cause you an “undue hardship,” meaning you’ve attempted to maintain payments and you’ve contacted your lender about relief options, but the payments negatively impact your standard of living.

If you truly have no way to pay back your private student loans, we recommend talking to a bankruptcy attorney to see if bankruptcy is a viable solution. You can also reach out to an NFCC-certified credit counselor to discuss all of your options for managing student loans and other debt.