Student Loan Forgiveness who Qualifies

The Biden administration has announced that more than 800,000 federal student loan borrowers will have their debt wiped out due to fixes that will more accurately account for monthly payments under existing income-based repayment plans. All told, a good $39 billion worth of debt is expected to be forgiven. 

You can qualify for federal student loan forgiveness based on a range of circumstances, including the type of work you do, your disability status and whether the college you attended defrauded you. There are far fewer student loan forgiveness programs available for private student loans than federal loans. 

What is The Difference Between Private And Federal Student Loans

The basic difference between federal and private student loans is that federal student loans are offered by the government, while private student loans are offered by a private-sector lender. These two types of loans offer very different benefits, interest rates, and repayment options. Federal loan terms are standardized while the terms of a private student loan vary from lender to lender. Some federal student loans are based on financial need, and private student loans are based on creditworthiness. 

Private Student Loan Lenders Examples

Some examples of private student loan lenders include Citizens Bank, Sallie Mae, LendKey, RISLA, Ascent, SoFi, Earnest and College Ave. 

Average Interest Rates on Private Student Loans

The average interest rates on private student loans can vary depending on the lender, the type of rate (fixed or variable), and the borrower's credit score. They can range from as low as 1.04% to as high as 14.96% for fixed rates and from 1.2% to 30% or more for variable rates. The overall average private student loan interest rate generally ranges from 6% to 7%.

What is The Difference Between Fixed And Variable Interest Rates

A fixed interest rate is an interest rate that remains the same for the life of the loan. A variable interest rate is an interest rate that can change over time based on an index. 

How to Apply For Private Student Loan

To apply for a private student loan, you can follow these steps

1. Research and compare lenders. Start by researching the best private lenders and make a list of three to five lenders you want to apply with.

2. Prequalify, if possible. Many lenders will allow you to prequalify for a loan without running a full credit check, allowing you to see what interest rates and terms you may qualify for.

3. Gather your information.

4. Fill out applications.

5. Compare offers.

What Information is Required to Apply For a Private Student Loan

To apply for a private student loan, you will need to provide the following documents. 

1. Proof that you're 18 years of age or older and a U.S. citizen

2. Proof you have a high school diploma or GED

3. Proof that you're enrolled in a college or university

4. Proof from your school's financial aid office that you require additional assistance

5. Proof that you meet any income requirements

6. Tax returns or W-2 forms from the previous years

7. Employment pay stubs

8. Personal identification information (driver’s license, etc.)

9. Bank statements

10. Information about the cost of attending school (if applicable)

11. Information about your cosigner (if applicable)

12. Loan documents for existing student loans (if refinancing)