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Borrowers with Bad Credit May Struggle to Get Private Student Loans

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Student loan debt today serves as one of the best examples of a double-edged sword. While college may open up the doors required to lead a productive and successful life later, the expenses may be overwhelming—and unfortunately, this may not be realized until later, when the bill is due.

Many student loans—with the debt ‘crisis’ currently made up of over 45 million borrowers responsible for paying back over $1.64 trillion—are not being paid back, leaving analysts to voice concerns over what the overall damage will be to the economy. There is also the continual, often heated, discussion regarding whose fault it is that so many borrowers are mired in burdensome debt. Some argue that the problem lies in the continued and perhaps not entirely merited rising tuition costs, while others blame for-profit schools overselling themselves (and in some cases with outright fraudulent behavior).

Federal loans, while generally a better deal than private student loans, are limited in terms of funds, but they should be used first—along with any and all possible grants and scholarships. Private student loans are often used, but they are not as easy to come by as many may think—especially when judging by the $1.6 trillion owed cumulatively.

If you are an older borrower with an established track record and a good credit score, being approved by a private lender may be easy. For younger borrowers though who may have never even been employed, a co-signer may be the only avenue to getting approved. And while this is common, it is extremely important for co-signers to be aware of what their responsibilities are if the primary borrower defaults on the loan. The general rule of thumb for co-signers is this: do not agree to such financial responsibility unless you have the cash in savings to pay off the loan should the need arise.

Private student loans without co-signers may also be possible at higher interest rates, but with the potential to be a serious and perhaps untenable burden later. These situations often arise with graduate school tuition too as it tends to be more expensive and borrowers may have already exhausted every other avenue.

Have you experienced problems with your loan service provider or student loan program, or are you in danger of defaulting on your student loan?

Speak with an attorney from Fitzgerald & Campbell, APLC as soon as possible to examine your options. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (844) 431-3851, or email us at

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