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I’m Unemployed With Private Student Loans. What Can I Do?

“Dear Steve,

I attended a private school and graduated in 2009.. I literally owe 3 different loan company’s total of over $80,000 combined.. 1 i owe roughly 8000.. Another the same.. The i have another (private loan) thats just about 60,000 but the interest rate continually rises… Im on unemployment right now with a newborn..I have been doing unemployment deferment since 09 when i graduated.. I wouldn’t mind if i could start paying on the loans but i can’t pay as much a month as demanded.. I have no idea of what to do, at all.. My credit is horrible bc of these loans and we have to put almost everything in my wife name… Please help.. Thanks”

Unfortunately it sounds like your student loans are not government backed or subsidized but private student loans. In that situation your only options are whatever the servicer decide they want to offer to you.

I understand the need to place the loans on deferment but when you do that typically the interest continues to accrue and the balance builds. It provides you with a temporary reprieve now but creates a bigger problem later.

Private student loans are the largest plight on debtors today. The loans have almost unlimited authority and can’t be discharged in bankruptcy unless Congress decides to reverse their 2005 changes.

Below you will find some general student loan resources but unfortunately, as I said, the good options are not available for private student loans.

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

READ  5 Ways to Kick a Private Student Loan Lawsuit in the Nuts

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • Wow this article really helps me with my situation as well. I am also under a Private Student Loan which I can’t pay because I am now unemployed, have 2 kids, single mom. My Private For-Profit School Institution is ready to sue me (Video Symphony in Burbank) on 5/24/12 and I don’t know what to do! I sent them a letter to come into an agreement to avoid court because I cannot afford an attorney, at this point I don’t know what to do. These  institutions don’t care if you have a job all they wan’t is money, I understand I have to provide, but I can’t right now. I regret this useless Institution, and what’s funny is that the CEO of the institution is the representing attorney himself, how can you beat that. I feel like I am battling Goliath 🙁

  • I really just wanna begin paying them because while its in deferment it is still gaining interest.. I thought of my own strategy to atleast begin: I wanted to take out a loan from my bank which is a credit union so my interest rate on that loan would be low.. So if my monthly charge for the student loan is 400 I would take out 4800 to pay for my student loans for the whole year. Although I would set it up with the bank to pay back the 4800 in 2-3 years so my monthly charges would be low but I would make definite to add more to payments when i get extra money.. Even tax return from next year would be extra cash to put toward it.. Does anyone think this is a good idea for my situation or no?

  • Don’t declare bankruptcy, just default.  It will end the endless charges they put on the account after 6 months.  Private loans are not Federal Student Loans so the government cannot come after you.  It depends on what state you are in as to wage garnishment.  My state doesn’t allow it unless you owe a government backed loan, taxes or child support.         

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