An increasing number of private student lenders are rolling out private student loans directed at parents. Sallie Mae’s parent loan will allow mom and dad to borrow at interest rates ranging from about 3.75% to 13%, with 10 years to pay it off. These loans will join the $150 billion of private student loan debt already in the marketplace, much of it cosigned and guaranteed by adults.

Private student loans lack flexible repayment options and forgiveness opportunities that federal loans have. Because the government does not subsidize private student loans, the rates and terms are not regulated the way they are for federal loans, which makes private loans more risky and expensive.

The default rate on these private student loans is far higher than that of federal loans, precisely because of the lack of repayment options. On today’s rewind episode I tell you everything you need to know about private student loans default – and how to get yourself out of a bad situation.

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