An ALPLN loan is a type of private student loan. The rules that govern the disbursement and collection of student loans differ from those that govern most other forms of debt. Even though student loans aren't tied to a vehicle, house or other tangible asset, they are treated as "secured" loans for repayment purposes. This makes it very difficult to discharge any student loan in bankruptcy.
Student loans backed by state and federal authorities, including Stafford loans and PLUS loans, are especially difficult to wipe away during the bankruptcy process. If you declare bankruptcy, you'll be able to rid yourself of your unsecured debts as well as your home and vehicle loans before you'll have any chance of reducing your student loans.
It's possible to consolidate some student loans. The government regularly helps out struggling post-graduates threatened by insolvency as a result of their student loan debts. Stafford, PLUS and Parent PLUS loans can be consolidated into longer-term debt facilities with low rates of interest.
The potential for consolidation is limited only by the existing interest rate on the applicable loan. A consolidation plan for a loan that carries an interest rate of 7 percent may reduce the loan's original rate by 50 percent or more. On the other hand, a consolidation plan for a loan with an already-low interest rate of 4 percent might reduce the rate by just a fraction of a full percentage point.
In the complex world of private loans, the potential for consolidation is also limited by the loan underwriter's willingness to renegotiate. Some banks maintain a strict policy against consolidating already-issued loans. For instance, Chase and Bank of America both take hard lines on the issue. On the other hand, some national banks exhibit more openness to the process. Community banks and credit unions are even more likely to renegotiate the terms of already-issued loans. While it's unlikely that a small credit union would issue a student loan in the first place, larger unions are likely to do so.
If your consolidation request has been rejected and you're looking for an alternate means of refinancing your obligations, seek out a refinancing company that specializes in loan consolidation. This company may work out an arrangement with your original lender that involves paying off the existing debt and issuing an entirely new loan at a lower rate. Be sure to keep your lender informed during this process.