By Stuart Schultz
Pre-paying all your loans, consolidating through the government, and fleeing the country are not the only ways to deal with your debt. You can also ask your parents to handle it!
That's true, but it's not what this article is about. Instead, we want to talk about what you're options are if you are either A) dealing primarily with private debt, or B) unable to afford any sort of monthly payment scheme. For you, private loan consolidators or forgiveness programs may be the ticket to a life without debt.
As noted in our student debt consolidation article, it is possible to consolidate both government and private loans through commercial (e.g., non-federal) debt consolidators, but if you only have private loans than you are forced to go this route.
Private Debt Consolidators
Prior to the credit crunch, there were a ton of consolidators who dealt with private loans (as opposite to government-issued Stafford loans). In fact, many of them also offered to consolidate government loans as well. Sallie Mae and NelNet were amongst the best and most reputable, but even they have stopped their consolidation services until the credit environment improves. We aren't going to recommend any private consolidators here, but we can give you the know-how to find the best one for your situation. Needless to say, all of the information we've shared about consolidation through the government still applies, so you should review the basic of student debt consolidation before proceeding.
What should I look for in a private consolidator?
The first step towards finding a private consolidator is calling your lender (the organization that originally lent you the cash for college). You'd be surprised, but many of them may offer to consolidate your debt rather then have someone else do it. Problem solved. However, if they don't, you can always ask them for recommendations. Here are some red flags you should look out for when vetting a recommended consolidator:
Ultimately, the reason why private consolidators are generally less favorable t...