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There is No Way I Can Ever Afford My Private Student Loans. What Can I Do?

Written by Steve Rhode


Dear Steve,

I have a total student loan debt of $140,000. Out of that total amount, about $131,000 is Private Student Loans. I have a bachelor’s degree that I received in 2012. I have been working since the day I graduated making decent money, but not enough to live on my own and afford my minimum private student loan payment of $1,200.

I recently had to leave that job because my father is very sick with cancer for the third time and needs help at home. So now I have to collect unemployment until I find a new job.

The only way I’ve been able to meet the minimum payments is because my mom helps me as much as she can. But with the $1200 minimum payment, and the $600 a month in federal loans, it is impossible for me to live.

I have tried to speak with my private student loan provider about lowering the monthly payment and making it an income based price, but they refuse to work with me. I have exhausted the deferment time of 12 months already and don’t know what else to do.

I read your article “10 reasons you should stop paying your private student loans” and really have been thinking about doing just that, stopping payments all together.

There is just no way I will be able to live if I try to keep making these minimum payments. The interest rates are extremely high on all of the loans and unless something drastically changes in my life, I will have to pay these for the rest of my life. I need help now more than ever. I am trying to help my dad pay for thousands of medical bills and now being out of work, I am not going to be able to live.

I want to take your advice on stopping payments on my private student loans. But I have my mom as one of my cosigners. I am scared to stop paying because I don’t want to ruin my life, but I am looking at this from a realistic perspective.

There is no way I am going to be able to pay this amount off. My question for you is, “What would you do if you in my situation? and What should my next step be?”
Thank you so much.

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Dear Michael,

Great question. Oddly I’m almost never directly asked what I would do in that situation. It made me smile, thank you.

It is a tough question because the action I would take is based on decades of helping people with impossible financial situations. It has given me a better than average appreciation of what is impartial actionable steps and what is emotional fear based on pressure from collectors.

It’s interesting you observed the private lenders are not willing to do anything to help you. They don’t have to. Private lenders are not required to offer you any solution that makes your payments reasonable or affordable. A private student loan is just a loan.

It is of little comfort now for me to say private loans can be a terrible trap but maybe looking back on what you have learned now from experience you might have a point of view and advice you can offer people. Living through a situation is a hell of a great teacher.

Loans are absolute. Private lenders expect at least the minimum monthly payment, month-after-month, regardless if you are unemployed or a loved one has cancer. Their general reaction to something like that is “too bad, so sad, where is our payment.”

If you separate emotion from reality you can see why they expect the payment no matter what is going on. They lend money to make more money. They don’t want excuses, they want their damn payment.

But life does not move in a linear fashion where every day is known and the future can be predicted with certainty.

The uncertainty of life contains risks. The lenders hedge their bets by pricing risk into the loan in the form of an interest rate estimated to offset the risk of loss. They count on some loss happening. People on the other hand tend to deal with risk by not considering it at all. Otherwise we would make sure to never borrow more than we could afford to repay with assets on hand.

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When or if you fail to make the minimum agreeable payment on your private student loans the lenders will go after the cosigner for full payment. That’s the role of the cosigner. They get all the liability for the loan with none of the benefit. By the way, if anyone ever asks you to cosign for a loan, don’t.

Ultimately the best decision on what to do will be dictated by the totality of your situation.

Faced with a lack or loss of income and a demand for payments you can’t afford to make over a long period of time, your choices on what to do are limited, but you have some.

The most likely strategy is either to file bankruptcy to deal with the loans, not all private student loans are protected. See These Private Student Loans Can Be Easily Discharged in Bankruptcy or as you read before, you may decide to strategically default and deal with the situation. Defaulting has risks and benefits.

The best decision for you is going to be one that is based on your willingness to understand the different options, become comfortable with the risks of the road you select to take, and understand at this time in the history of man, there is no magic solution when it comes to dealing with private student loans.

The federal student loan situation is easier to deal with, click here for how to do that.

I hope that helps at least guide you into a contemplative introspective look at the reality of the situation and give you some idea which path is the least painful for you and your mom.


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.

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.


  • Michael,

    I agree with Chris but used a different tactic. I stopped payment and then went to a lawyer after realizing that I couldn’t dig myself out even trying to work three jobs. Even if a lawyer is not an option start looking at debt settlement since that is essentially what a strategic default would force the lenders to do. They’ll have to work with you and if they sue you then laugh in their face. Show up in court with your net worth (mine is negative) and they’ll just waste their time and money really. While they can try to go after your co-signer the reality is when they look at how much (or little) you both have in assets it seems you may not be worth taking to court.

    You may also want to look up the statute of limitations for suing over an unpaid debt in your state as well. I paid at a high cost to my health for a long time before I stopped. The lawyer I negotiated with I paid up front 100% and researched his firm. You should also check to see if you can get those loans thrown out as Steve Rhode suggested. Make sure any agreement you get in writing states that your loan is PAID IN FULL so they can’t sue you a year later or two after you renegotiate a payment or a payoff amount. That’s why I hired a lawyer because the scumbags I got loans through are notorious for suing people years after settling.

    Best of luck to you and I hope your father recovers.

  • Michael,

    I was in the same situation except has 210,000 in private at a 9% interest. They wanted $1700 a month. I ended up defaulting and I am so glad I did the calls stopped for a little and then one person called.. They claim that there from a debt collection agency but they are really Sallie Mae’s collection department. They want to keep these loans because if they sell them they lose a lot of potential income. Ok the real effects of default, 1 your credit score will drop at least 100 points. 2 they will look at every asset that is in your name and your cosigners and see if it would be worth suing you for the money.. If not they will work with you at this point. I got them to reduce my payment to 250/month at a .001% interest rate. Remember before I had 9%.. The loans currently show as charged off on my credit report.. And it is something I will have to explain very carefully when I go for any type of credit

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