Will Private Student Loan Lenders Forgive Loans Under PSLF?

Question:

Dear Steve,

I work in a public non-profit and currently have federal and private (Navient) student loans. I am in the PSLF program but still have about five years to go.

Is there any talk by the federal government (or anyone else) about requiring private student loan companies to participate in a program similar to PSLF for private loans?

Caryn

Answer:

Dear Caryn,

I think there is a zero percent chance of having private student loans forgiven under the Public Service Loan Forgiveness program.

The US government has resisted touching any private student loan forgiveness, modification, or exerting much control.

The only chance I see this might even be a distant possibility would be if there were a majority Democrat political administration in the White House and Congress with a veto-proof majority to pass new legislation on this.

Republicans have typically had a more hands-off business approach unless the business is getting a benefit or perk from the proposal.

I’m not suggesting either approach is right or wrong, just a historical difference of opinions.

For example, look at how the Trump administration gutted the PSLF program and denied most applications for forgiveness. The Biden administration restored forgiveness and added a waiver program to help more people qualify.

And by the way, that PSLF waiver program is ending soon. I talk about it in my recent podcast.

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Since private student loans have nothing to do with the Department of Education and are essentially nothing more than a consumer credit arrangement, it is improbable.

I honestly don’t feel that is a cynical point of view. It is based on experience and reality.

Sincerely,

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Damon Day - Pro Debt Coach