How Can My Family Crawl Out from Under Crushing Private Student Loan Debt?


Dear Steve,

My two children graduated from college. One attended Pace University and one Fordham University. They both work and pay their student loans to Navient formerly Sallie Mae on time. I have a Parent Plus loan from Navient. Between all of us we have about $250,000 in student loan debt. My husband and I are constantly thinking of ways to relieve this burden from all of us. It seems hopeless. Most of the loans are private and have 8% interest.

Both of my children want to make a career change since they are not making enough to live. My daughter wants to go to nursing school. What do you suggest to us? I would appreciate any advice. Right now, all of us are working and giving all our money to these loans. Loan forgiveness? What can we do to get rid of this debt more quickly?



Dear Diane,

Unfortunately, the day people take out private student loans, the future has been decided. Private student loan lenders do not have to make any affordable payment arrangements, do not have to offer any forgiveness, and often ask for co-signers.

The good news here is the Parent PLUS loan can be consolidated and put into an income contingent repayment plan if your income is not all that wonderful. You can use this online calculator to see what your payment would be.

I have long had an issue with all schools that facilitate kids into private student loans without much explanation that your field of study and income have to play a role in deciding how much private student loan debt you can afford. Schools and lenders do little to no screening and pass out loans like crack.

The obvious way to get rid of the debt quickly would be to pay it off in full. I know, I just felt compelled to state the obvious.

See also  How Do I Strategically Default on My Private Student Loans? - Eric

If you are not a co-signer on the private student loans then the kids could think of a more drastic step, strategic default. Read Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan.

It is a strategy with consequences but it is a valid strategy in situations where there is no other way out.

If the kids went this route, they would still be able to qualify for federal student loans, but doubtful any private lender would touch them following default.

If your daughter had federal student loans and not private, she could probably get on a $0 a month income plan while in nursing school and possibly be eligible for total loan forgiveness after 120 months of income based payment through the Public Service Loan Forgiveness program if she went to work in many of the healthcare opportunities that qualify.

The bottom line is there is no painless way to break this cycle. The die has been cast for many and their futures ruined the day they attended their first class using a lot of borrowed money.

But I don’t want to get you horribly depressed. I’m just saying the options that are available won’t come without some pain.

If you wanted to talk to someone who is very knowledgeable in the entire strategic default process, talk to my friend Damon Day.


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.

Damon Day - Pro Debt Coach

Steve Rhode

2 thoughts on “How Can My Family Crawl Out from Under Crushing Private Student Loan Debt?”

  1. i would like to know why all the sudden private student loans are such a “hot” topic. before they were “taboo”. essentially saying “never take them” it’s like a “death sentence” and Never let anyone co-sign.NEVER but now? what has changed?

    Please help me understand the ‘shift” – as usual confusion is again, around this topic.

    thanks steve – Jason

    • Thanks for the comment Jason. Things dramatically changed in 2005 with the signing of the Bankruptcy Abuse Prevention and Consumer Protection Act. That was the swing moment for private student loans to become a point of abuse. The implementation of seeming protection from bankruptcy led lenders to rope people in more and more with private student loans. However, what they missed is that not all private student loans are created equal. Then lenders got really sloppy, like with National Collegiate Student Loan Trust (NCSLT), where the documentation to support those loans has gone missing and fractional shares of that loan pool were sold.

      There are a few key points to remember around this topic in 2018.

      1. Just because a lender will approve you for a private student loan, that does not mean you can afford it.
      2. Lenders would much prefer sucking in a co-signer on unaffordable loans. Cosigners don’t understand they are 100% responsible for the loan. It’s not the lender’s job to explain that.
      3. All student loans are thought to be protected in bankruptcy. They are not. But the average student with an unprotected student loan does not have the resources to fight back when they are down and out. As evidence of that, all you have to do is a search for all the current lawsuits against debtors for unsubstantiated NCSLT loans. They happen every day and nearly all of them could be defended against.

      Finally, private student loan lenders have no requirement to allow for a loan to be adjusted for affordability like is imperfectly available under federal loan programs. This means that students who agree to use both private and federal student loans can wind up with easy financing and debt for a degree that will never support the repayment of the debt. Take for example, $90K for an Associates of Arts Degree.–.html


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