Will Collections renegotiate the terms of a private loan?

Private loans will not renegotiate the terms of the loan. They can be hell to deal with as there is no requirment for them to offer alternative payment plans or offer deferments or forbarances. The only real option you have right now is to increase your income. They will file for judgement against you if you default.

Increase income you say?? That sounds nice. I wish it was that easy. How can private lenders get away with $300K finance charges for helping someone go to school??? Doesn't that completely defeat the purpose???!?! Any other suggestions that are more realistic?

Unfortunately, those were the terms you sign for and $75k is a small mortgage. They can "get away" with it because they are private loans, not governed by the federal system. And unless you want a judgement and 25% of your wages garnished for the rest of your working life, increasing your income is the only reality with private loans!

Soaplady I've got a few questions?

Aren't some private loans guaranteed by the government? And if so, when the government takes them over, can't you work out something then?

If they're not guarenteed, then isn't it just one big unsecured loan? I thought the only reason you couldn't BK on most student loans was because they were backed by the government. But if they're not backed by the government, why can't you go BK on it?

Ok...we have two types of loans, private and federal.

Federal loans include both Direct Loans from the DOE and FFELP loans which are guaranteed by state or regional guaranteed agencies. FFELP loans are issused by companies such as Sallie Mae, Citibank, Wells Fargo, plus literally hundreds of other banks.

Then you have Private or alternative loans. These loans bridge the gap between other lending and the cost of attendance. Also issued by Sallie Mae, TERI, Citibank, Wells Fargo and serval other banks and companies, usually from a non profit trust or division of that company. Private loans do allow deferemnt while you are in school, but from that point on, they are just like normal consumer loans.
-interest rates based on credit score and can be very high
-may require a cosignor
-interest starts accruing day one
-no or limited forebearance priveleges
-no or limited hardship or reduced payment options.

Since these loans are outside the federal system, they cannot use admin wage garnishment like the federal loans. The do actively sue and take out judgments and students find themselves being garnished at the 25% rate.

Private loans are also not dischargable in bankruptcy anymore. The BK code includes all loans "educational purpose" (going of the top of my head with less than a full cup of coffee in my system)from a non profit source. Like federal loans, hardship discharge is possible but extremely rare as most borrowers fail the Brunner test.

When I was working FA, I warned all students from borrowing private loans, or at least limiting the amount they borrowed. Sometimes you have to but for most students they were better off avoiding these loans at all costs.

I guess I'm glad I only have $9k left with the DOE ($109/month).

I remember at one time Key Bank appproved me for $15K. At the time I was thinking I would take it and they would pay the school, and since tuition was only $5K then school would give me $10K as a refund. I'm glad I never did that because it would have lead to disaster.