06/24/2014 02:19 pm ET Updated Aug 24, 2014

What Can I Do About My Private Student Loans So I Don't Default?

Huffington Post Reader Question

"Dear Steve,

I have an excessive amount of private school loans. My parents did not necessarily help me during college and so my loan amount was requested at a little more than my tuition in order to sustain other college expenses. At this time I have exhausted my Graduated Repayment options and am no longer eligible for any type of help and so my loans are averaging to about 2/3 of my paycheck.

What can be done to help? I don't want to file bankruptcy if I don't have to but I am on the brink of defaulting on my loans. What are my options here? I have tried calling around to many Default Prevention programs but they mostly deal with Federal loans. What are my options when it comes to financial hardships on private loans. Who can I contact?


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Dear Temple,

You are what us professionals in the debt relief world like to call "screwed."

No private lender is required to alter any payment plan or forgive any debt if they don't want to. There are of course some small exceptions for those that can find a bankruptcy attorney who knows about things like this and this.

If you have other debt that is preventing you from making your student loan payments you should also consider discharging that to make room for private student loan payments.

To make things even worse, some private lenders have been calling the total loans due when the co-signer, they required, does something entirely natural like die. "Hey, your loved one died, pay in full now."

Now you did say that part of your private student loan was not used for tuition but living expenses. That part can be discharged by bankruptcy but most are not aware of that.

The graduated repayment plan, forbearance, or deferment for private loans is not a solution. It just grows the balance and makes the problem worse down the road. But for many those pseudo-options are like a flame to a moth.

Until lawmakers change the law, student like you who received private student loans like candy will be up a creek without much of a paddle.


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States With Highest Average Student Debt - TICAS - Class Of 2012