Financial Assistance Options for Private Student Loans During COVID-19

With COVID-19 disrupting jobs, income, and the financial stability of millions of people in the U.S., many have found they’re struggling to keep up with student loan payments. 

For borrowers with private student loans, figuring out how to get help may be more confusing. Private student loan forbearance and relief for coronavirus-related hardship are offered at each lender’s discretion. 

Here’s a look at other private student loan relief and coronavirus assistance borrowers might be able to claim.

Private Student Loan Lenders Offering Relief Options

The good news is that most private student lenders and servicers have emergency programs to assist borrowers through the current financial crisis. 

Many borrowers can access emergency or disaster forbearance specific to the COVID-19 pandemic. These options may pause payments for at least one month and often more, depending on the lender’s guidelines and program. 

Some private lenders offer other standard forbearance and deferment options on top of coronavirus forbearance. Hardship forbearance is a more common private student loan benefit that can help borrowers facing a job loss or drop in income. Some lenders also offer deferment for active-duty military service or for those re-enrolling in college.

Other potential forms of private student loan assistance include modified payments or interest rates. Some lenders can provide a temporary interest rate discount or accept interest-only payments.

All of these coronavirus private student loan relief programs require borrowers to request or apply for this relief and meet eligibility requirements. Contact your lender or servicer directly to discuss your situation and ask what student loan relief you might be eligible for. Below, we’ve outlined the coronavirus student loan relief offered by some major private lenders. 

Ascent

In response to the pandemic, Ascent announced a new forbearance option for natural disasters or declared emergencies. Borrowers can choose to forbear payments for up to three months for reasons related to the pandemic. Ascent also offers four months of forbearance for temporary financial hardships. Contact Launch Servicing for help pausing payments.

Citizens Bank

Citizens Bank offers three months of COVID-19 emergency loan forbearance, with the option to request two more three-month forbearance periods if you continue to experience financial hardship. To request forbearance, contact Citizens Bank’s student loan servicer, Firstmark Services, at 855-819-7137.  

College Ave

Borrowers unable to make monthly payments on College Ave student loans due to COVID-19 might be able to get a disaster forbearance. College Ave may also grant a hardship forbearance in three- or six-month increments (up to a 12-month limit). College Ave directs borrowers to call 844-803-0736 to request this type of assistance.

CommonBond

CommonBond’s natural disaster forbearance offers relief for borrowers during the coronavirus pandemic. CommonBond grants this forbearance in one-month increments. At the end of the first month of forbearance, you can apply for an additional 30 days if you are still being impacted. It also won’t count toward the lender’s limits on standard forbearance, and accrued interest is not capitalized (added to the loan’s principal). You can complete a forbearance request form on CommonBond’s site to apply.

Discover

Discover will work with qualified student loan borrowers to manage payments if they’re experiencing financial hardship. Eligible borrowers may postpone loan payments for up to 12 months during the term of their loan, but the 12 months can not be consecutive. Student loan borrowers can call 800-STUDENT (800-788-3368).

Earnest

Earnest offers coronavirus student loan repayment assistance through a few options. Although short-term coronavirus forbearance ended on Jan. 31, 2022, Earnest still offers a short-term interest only program. Contact Earnest through the form on its site or by phone at 855-203-4596 to discuss your forbearance options.

Laurel Road

Borrowers can request a three-month forbearance on Laurel Road student loans if their incomes are impacted by the COVID-19 pandemic, with the option to request a three-month extension, if they had not used in total nine months of COVID-19 forbearance. Interest accrues during forbearance and will be capitalized and added to the remaining principal of the loan at the end of the forbearance period. Contact Laurel Road’s servicer MOHELA at 877-292-6845.

Navient

For Navient private student loans, the servicer offered a short-term forbearance option that brought loan accounts current and paused payments for at least one month, but the program ended on Jan. 31, 2022. Interest accrued but doesn’t capitalize, and this short-term forbearance wouldn’t count toward Navient’s general forbearance options. Navient also provides other options that can lower monthly payments, such as a temporary rate reduction, interest-only payments, or extended repayment. Contact Navient by phone at 888-272-5543 to discuss your options.

PNC

Several PNC hardship assistance programs can help its customers through COVID-related setbacks. This lender does not offer details of its student loan hardship assistance but directs PNC student loan borrowers to call 800-233-0557.

Sallie Mae

Sallie Mae does have assistance options available for borrowers having difficulties keeping up with payments. However, it doesn’t list any details, instead directing borrowers to reach out to Sallie Mae through online chat or by phone at 833-558-6577 (or 877-604-8834 if your account is past due).

Will Deferred Student Loan Payments Negatively Impact Your Credit Score?

Making on-time payments is central to building and maintaining good credit. So you might wonder how taking a break from payments through deferment or forbearance will affect your credit.

Fortunately, a pause in payments due to a forbearance or deferral agreement won’t damage your credit. Your student loan account will remain listed on your credit report as open and in good standing. 

And if you’re in danger of missing student loan payments, forbearance or deferment could protect your credit. Late payments or delinquencies will be reported and that can negatively impact your credit. Applying for forbearance or deferment can help you avoid missed payments and damage to your credit.

Should You Refinance Private Student Loans Right Now?

When experiencing significant financial hardship, reaching out to your current lender should be a first step. It can offer immediate relief and assistance for burdensome private student loans.

If you’re dissatisfied with your current lender, you may be wondering about refinancing your private student loans. But keep in mind that student loan rates are much higher than they’ve been in recent years, which means that many borrowers would end up paying more by refinancing. 

Choosing a longer repayment will also mean that it’ll take longer to pay off this debt, and you might face higher total costs over the life of the loan.

Also, if you’ve had a recent financial hardship, such as a drop in income or job loss, that could make it harder to qualify for a new private student loan. You’ll need good credit or potentially a co-signer to get approved to refinance student loans and be offered favorable rates. If you’ve missed payments or had other issues with existing debt, you could hurt your chances of getting a good deal.

Now is definitely not a good time for refinancing federal student loans. Refinancing federal student loans could mean losing important benefits and protections, including paused payments and interest, and the potential for complete student loan forgiveness.