The Biden administration’s student loan forgiveness program only applies to those with specific direct federal student loans that are currently held by a U.S. Department of Education loan servicer.  These loans are only accessible through the Federal Application For Student Aid (FAFSA). Asylum seekers and many others are ineligible for FAFSA and therefore are not eligible for this loan forgiveness program. 

Loans that are eligible for forgiveness are subsidized or unsubsidized loans held directly by the U.S. Department of Education. Some federal loan programs – like Federal Perkins Loan Program loans and Federal Family Education Loan (FFEL) Program loans – are serviced by private lenders and are ineligible for forgiveness, unless they were consolidated under a Department of Education servicer prior to September 29, 2022. A list of official Department of Education Loan Servicers can be found online at 

Borrowers ineligible for the FAFSA who accessed student loans from private lenders are not eligible for federal relief. However, if private education loan borrowers are struggling to make monthly payments, borrowers can take some actions to lower their liability or reduce monthly payments: 

1.         The Maine Educational Opportunity Tax Credit can be claimed on your Maine Individual Income Tax Return and is applicable to any student loan in repayment.  This credit returns to the borrower a portion of loan interest paid in a calendar year. 

The Alfond Leaders Student Debt Reduction Program provides student loan repayment assistance to graduates of STEM (science, technology, engineering, and mathematics) programs who are currently working for a Maine-based employer. 

Some employers offer tuition reimbursement and other assistance programs to their employees. Ask your employer about educational assistance as a benefit. More information can be found on the FAME Maine website:

2.         Call your lender to ask about reducing payments or refinancing. Sometimes a phone call is all it takes to lower monthly payments. Refinancing options can also lower total liability – the amount you owe the lender over time – by securing a lower or fixed interest rate. Be sure to check your credit score before refinancing! A score of 700 or higher will yield the best result, but be aware that multiple credit inquiries can lower your credit. 

3.         Look for other refinancing or consolidation options. Sometimes a better interest rate can be found with a new lender. Consolidation is an option for borrowers with many small loans for many different semesters of school. A consolidating lender will purchase each loan and roll the outstanding balance into one monthly payment with a new interest rate. Benefits include the convenience of paying one loan per month; potentially lowering total monthly payments; and securing a better interest rate if your credit has improved. A potential risk could be paying more money back to the lender over the lifetime of the loan. 

4.         If you have defaulted on a private loan, negotiate a settlement with the lender. Lenders don’t want you to default on your loan! If you have defaulted for any reason – family emergency, loss of a job, legal issues, bankruptcy, or just a series of honest mistakes – call your lender immediately and explain the situation. Your lender will work with you to develop a settlement or repayment plan to get you back on track and eliminate your debt. This will prevent potential legal action and help repair any damage to your credit in the long term. 

Student loans are not dischargeable in bankruptcy, which means that bankruptcy does not eliminate this debt. Also, while most loans are “forgiven” if the primary borrower dies, any co-signers on a loan will be responsible for paying off the remaining debt. A co-signer is usually one other person such as a parent, spouse, or relative who signed paperwork – along with the borrower – with the bank or lender. Family and friends who did not co-sign on debt are not responsible for paying back the lender, and lenders cannot sue relatives of the borrower for missed payments unless that relative co-signed on the loan. In the case of a co-signer taking on liability for a loan, many lenders will be willing to work with the co-signer to discharge the debt on a manageable repayment or settlement schedule. 

Private education loans can be a good option for college students and their parents provided they understand the responsibilities and risks. ProsperityME offers one-on-one confidential financial counseling to community members with questions about loans, credit, savings, and investment. Counselors can help develop an education funding plan and make a financial plan that is right for clients .FAME Maine also offers financial counseling and is specific to student lending. In addition, the Peer Workforce Navigator Project is a multicultural, multilingual support coalition that can assist clients with referrals so people get the assistance they need.