When you’re looking at a significant private student loan debt, your options are limits to two – pay or don’t pay.
If you can afford to make the payments, you should do so as quickly as possible. The faster those private student loans are paid in full, the less you’ll wind up paying in interest charges.
But fail to make payments and you’ll find that there’s no help for you. Federal student loan programs such as income base repayment, Pay As You Earn, and rehabilitation simply don’t exist.
In fact, there’s no legal difference between a private student loan and a standard bank loan. The only time a distinction is drawn is when you’re in bankruptcy court, which is when you find out just how difficult it can be for most people to wipe out the obligation in bankruptcy.
When there are no formal repayment options, no bankruptcy relief and no ability to repay the debt … what do you do?
My recommendation (and it may be a controversial one) is to consider letting the default happen.
What Happens When You Default On Your Private Student Loans
Make no mistake – defaulting on your private student loans is serious business.