Private Student Loans
Private student loans are issued by a bank, lender, or other institution. Private loans are not backed by the federal government and are made outside of the federal government student loan programs. The majority of student loans issued today are federal student loans. However, you may have taken out private student loans at some point to cover any additional costs that weren’t covered by your federal student loans for your education or to cover the costs of a program that wasn’t eligible for federal student aid.
The private student loan industry grew throughout the 1990s and early 2000s. Unfortunately, many of the lenders targeted low-income borrowers with high-interest and risky loans. Too many of these high-cost loans were destined to fail. Many lenders targeted for-profit school and low-income students with the most expensive products. The market for private loans is evolving today. We are now seeing new costly private student loan products, such as income-sharing agreements (ISAs) and college credit cards.
While private student loans don’t offer the same protections, benefits, and relief as federal student loans, you still have a lot of rights as a consumer. If you are struggling with private student loan debt, don’t give up! We have tips and information for borrowers looking for help with private student loan repayment, debt collection, bankruptcy, settling private student loan debt, and more.
Other Non-Student Loan Education Debt
In addition to private student loans, you may also have other non-student loan education debt from your time in school. This could be tuition debt or bills owed directly to the school that weren’t covered by any of your student loans or financial aid. It could also be fines, fees, and other costs owed to the school, such as campus parking tickets, damages charges to your dorm room, late withdrawal fees, or library fines. Although this debt isn’t related to your student loan debt, and you don’t have the same kinds of protections and relief options available to you when you are behind on your federal student loans, you still have rights and protections as a consumer. See our page on other education debt for more information.
How Can I Tell If I Have a Private Student Loan?
It may be hard to tell at first glance if you have a private or a federal loan because many private student loan lenders also manage and service federal student loans. You may also have both federal and private student loans.
Unlike federal loans, there isn’t a central place that stores all of your private student loan information. However, your private student loans may be listed on your credit reports. Because federal student loans are usually listed on your credit reports too, it may be hard to tell if the loan listed is a federal loan or a private loan. If the loan is labeled as “Department of Education,”“DEPT of ED,” or “DEPTED,” it is likely that it is a federal loan, but not all federal loans are listed this way on a credit report.
See our page finding your student loan loan information for more help understanding what loans you have.
Key Private Student Loan Features:
- Private student loans are issued by a bank, lender, or other institution.
- You apply directly with the lender (you don’t use the government’s FAFSA form to apply).
- The amount you can borrow is set by the lender.
- The loans that are offered are based on your credit.
- A co-signer may be required by the lender (usually a close relative, but doesn’t have to be) in order to get a loan.
- Interest rates may vary.
- Private lenders rarely offer affordable repayment plans, loan cancellation or forgiveness programs, or pathways out of default.
- There is no central place to find private student loan information.
For more information, see our page on federal loans vs. private loans.