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Student Loan Law: Private Student Loans

Introduction

Banks also make private student loans without any direct financial backing from the federal government. Private loans are also known as private label or alternative loans. The most reliable way to find out whether a loan is federal is to check out the Department of Education's National Student Loan Data System (NSLDS), although it is only open to authorized users.

Private student loan creditors do not have the same range of powerful collection tools as the government, mentioned in the Collections on Defaults tab of this guide. In that way, they are better for students. However, students cannot take advantage of the public loan forgiveness or income based repayment plans when paying back private student loans. If you refinance with a private student loan company, such as SoFi, you will lose the benefit of these programs as well. Pres. Biden's student loan forgiveness plan also does not cover private student loans.

 

 

Agency Guidance

CFR

Cases