FAQs
Private student loans—also known as personal student loans— are offered by private lenders to provide funds to pay for educational expenses. They are not part of the federal student loan program and generally do not feature the flexible repayment terms or borrower protections offered by federal student loans.
Are private student loans federally insured? ›
Many former students have federally guaranteed student loans. These loans are different from private student loans that the government doesn't guarantee, and from loans issued directly to the student by the federal government (direct loans).
Who regulates private student loans? ›
We're the Consumer Financial Protection Bureau (CFPB), a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.
Are private student loans being forgiven? ›
Only federal student loan borrowers qualify for these options. While the Biden administration has forgiven $146 billion in student debt so far, private student loan borrowers don't qualify for any loan forgiveness plans.
How do I know if my student loan is federal or private? ›
How to tell if your loan is federal
- All federal loans will have “Direct” in their names, like “Direct Subsidized Loan,” “Direct PLUS Loan” or “Direct Consolidation Loan,” for example.
- For PLUS Loans, you might see specific titles, like “Parent PLUS Loans.” Older student loan names include Perkins, FFEL, and Stafford.
Private student loans can come with potential issues for borrowers, such as limited repayment plans, ineligibility for federal forgiveness programs and fewer relief options during financial hardship. They often require a creditworthy cosigner and have variable interest rates, which may increase the cost over time.
Why do people get private student loans instead of federal? ›
Federal student loans are generally recommended due to fixed interest rates, repayment flexibility and forgiveness options. However, if you require more funds than federal limits allow or have excellent credit, private loans might be more favorable with potentially lower rates or higher borrowing amounts.
Can you be sued for private student loans? ›
A private student loan default could damage your credit score and lead to other harsh consequences, such as wage garnishment or a lawsuit. Because of this, it's critical to act fast when facing a student loan default. Here's what happens if you default on private student loans and how to recover.
Can private student loans be reported to credit bureaus? ›
But student loans are not commitments that should be entered into quickly or without doing thorough research." Similar to other financial commitments, student loans can appear on credit reports.
Can I sue my private student loan company? ›
In general, borrowers can sue a student loan servicer. If there is a class-action lawsuit against a provider or school, borrowers automatically become a part of the class-action lawsuit but are not directly suing any party.
How to get rid of private student debt. One of the few ways to get rid of private student debt is through discharge bankruptcy. It's an arduous — and expensive — process. You'll have to file Chapter 7 or Chapter 13 bankruptcy, then file an additional lawsuit known as an adversary proceeding.
Do private student loans ever fall off? ›
Do student loans fall off your credit report? Both federal and private student loans fall off your credit report about seven years after your last payment or date of default. You default after nine months of nonpayment for federal student loans, and you're not in deferment or forbearance.
Can private student loans be bankrupted? ›
Yes. Student loans can be discharged in bankruptcy, but it isn't always easy. This is especially true for private student loans. Student loan debt is an unsecured debt, just like credit card or medical debt.
Are Navient loans federal or private? ›
Navient no longer services federal student loans, but it still services private student loans. Cecilia Clark is a writer and spokesperson on the education team. She covers student loan refinance and manages product reviews and roundups.
What are considered private student loans? ›
Private student loans—also known as personal student loans— are offered by private lenders to provide funds to pay for educational expenses. They are not part of the federal student loan program and generally do not feature the flexible repayment terms or borrower protections offered by federal student loans.
What is the maximum amount you can borrow for private student loans? ›
Private Student Loan Limits
Undergraduates usually have aggregate loan limits from $75,000 to $120,000, while graduate and professional students may qualify for higher limits. Remember, these limits cover all student loan debt - both federal and private loans combined.
Is Sallie Mae a federally insured loan? ›
All Sallie Mae loans taken out since 2014 are private. The best way to determine if you have federal or private student loans is to check studentaid.gov. If you need to borrow money for college, exhaust federal student loans before taking out a private student loan.
Is Sallie Mae federally insured? ›
Are Sallie Mae Bank accounts FDIC insured? Yes, our deposit accounts are FDIC insured up to the maximum amount allowed. To learn more about FDIC insurance limits, visit www.fdic.gov.
When did student loans become federally insured? ›
The federal government began guaranteeing student loans provided by banks and non-profit lenders in 1965, creating the program that is now called the Federal Family Education Loan (FFEL) program.
