MOHELA Student Loan Forgiveness for Private Loans

Student loan debt is a crisis affecting millions of Americans, with private loans often being the most burdensome due to their high interest rates and lack of flexible repayment options. While federal student loan forgiveness programs like Public Service Loan Forgiveness (PSLF) and income-driven repayment (IDR) plans have gained attention, private loan borrowers are left wondering: Is there any hope for MOHELA student loan forgiveness for private loans?

The Reality of Private Student Loan Forgiveness

Unlike federal loans, private student loans are issued by banks, credit unions, and other financial institutions—not the government. This means they don’t qualify for federal forgiveness programs. MOHELA (the Missouri Higher Education Loan Authority) primarily services federal loans, but some borrowers may have private loans through other lenders that MOHELA later acquires or services.

Why Private Loans Are Different

Private loans lack the protections of federal loans, such as:
- No income-driven repayment plans
- No federal loan forgiveness programs
- Limited deferment or forbearance options
- Higher, sometimes variable, interest rates

This makes private loans particularly difficult to manage, especially for borrowers facing financial hardship.

Is MOHELA Offering Private Loan Forgiveness?

Currently, MOHELA does not administer private loan forgiveness programs. However, there are still potential avenues for relief:

1. Lender-Specific Forgiveness or Discharge Programs

Some private lenders offer loan discharge in cases of permanent disability or death. Others may provide hardship programs, though these are rare and often temporary.

2. State-Based Assistance Programs

A few states have introduced student loan repayment assistance programs (LRAPs) for residents in certain professions, such as healthcare or education. These are not forgiveness programs but can help reduce debt burdens.

3. Bankruptcy Discharge (Extremely Rare)

Unlike federal loans, private student loans can sometimes be discharged in bankruptcy—but only if the borrower proves "undue hardship," a notoriously difficult standard to meet.

4. Refinancing for Lower Payments

While not forgiveness, refinancing private loans at a lower interest rate can make payments more manageable. However, this often requires strong credit and stable income.

The Push for Private Loan Reform

With student debt surpassing $1.7 trillion, advocates are pushing for broader reforms, including:
- Expanding bankruptcy protections for private loan borrowers
- Pressuring lenders to offer more flexible repayment options
- State and federal legislation to provide relief for private loan holders

Recent Developments

The Biden administration has focused primarily on federal loan forgiveness, but some lawmakers have proposed extending relief to private borrowers, especially those who were misled by predatory lending practices.

What Borrowers Can Do Now

If you’re struggling with private loans, consider these steps:
- Contact your lender—ask about deferment, forbearance, or repayment adjustments.
- Explore refinancing—compare rates from multiple lenders.
- Check state programs—some states offer assistance for certain professions.
- Advocate for change—support organizations pushing for private loan reform.

While MOHELA student loan forgiveness for private loans isn’t currently an option, staying informed and exploring all available resources can help ease the burden. The fight for broader student debt relief continues, and private loan borrowers deserve a seat at the table.