Federal student loans have flexible repayment options, but private loans do not. If you fail to pay your private loans, you and also your co-signer if you have one, are likely to be served with a lawsuit.

Only take private student loans out, if you are going to be able to repay them, or if you are a cosigner, if you are prepared to just pay them. And you may find yourself repaying a lot more than was borrowed. Their interest rates are much higher as a rule than federal loans.

Private student loans were dischargeable in bankruptcy until 2005, but the law was changed, and they are not usually discharged in bankruptcy now unless the borrower can show "undue hardship" to a bankruptcy judge, which is a difficult burden to prove, and can cost significantly more in attorney's fees.

Also, private student loans are not usually forgiven upon death of the borrower, whereas federal loans are. They can pursue the borrower's probate estate for collection of the unpaid balance, or if there is nothing to collect there, they can pursue any-cosigners.

J Thomas Black
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Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization
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