Private Student Loan Repayment

Student loans never die. Even in bankruptcy, you can’t get rid of your student loans. It’s important to pay them off.

There are two types of student loans: Federal (owned by the government) and Private (owned by a bank). It’s hard to tell what you have by simply looking at them. To figure out what you have, you can call each lender, look at your recent statement or follow these steps:

  1. Go to the National Student Loan Data System
  2. Log in using your FSA ID. Note: If you need to create an FSA ID, click the gray box that says "Create an FSA ID".
  3. Once you’re in the database, it will show you all your FEDERAL loans and remaining balances.
  4. All your other student loans are private.

Your private student loans are top priority.

First, these loans have variable interest rates. That may be good now but, when rates go up over the next few years, the new payments will be painful.

Second, banks are less forgiving than the government. They know that you must pay back your student loans. They don’t negotiate and they rarely change payment terms. They’re in a position of power which gives you few options. Federal loans, on the other hand, have fixed interest rates and offer deferment, forbearance, multiple payment options and forgiveness prgorams. You can learn more about these options here but make sure you payoff your private student loans first.

What's your experience with private student loans? What was your strategy for paying them off? What options did you have?