Nearly $32,000 in private student loan debt was forgiven for an 86-year-old grandmother.

• Some private student loan lenders provide debt forgiveness options for disabled borrowers.
• Navigating the process of learning about it is difficult, consumer advocates claim.

Rebecca Finch couldn't think of a better gift for her 86th birthday.

In early September, Navient informed her that the private student loan on which she was a co-signer would be forgiven.

The remaining balance of $31,730.76 on your private student loan has been waived, as stated in the Aug. 29 letter.

Rebecca was informed by Navient that she qualified for disability discharge shortly after CNBC published an article about the Finch family's situation.

Sabrina Finch, Rebecca's daughter, stated that the journey to that relief was arduous, perplexing, and highly stressful.

Sabrina, 53, found it challenging to discover the forgiveness option.

'Transparency is severely lacking'

The private education loan industry has rapidly grown due to the increasing cost of higher education, but it lacks protections for borrowers facing repayment difficulties, such as disability, according to consumer advocates.

An analysis by higher education expert Mark Kantrowitz reveals that only half of private lenders provide student borrowers with the option of loan discharge if they become severely disabled and unable to work.

In comparison, all federal student loans come with that option.

Advocates say that even when a private student lender grants a disability discharge, the information is not widely publicized.

The director of the Education Debt Consumer Assistance Program, or EDCAP, based in New York, stated that transparency is severely lacking.

Rodriguez stated that it is frequently challenging for borrowers to connect with a representative who possesses comprehensive knowledge about the disability discharge option.

Many Americans would rather discuss politics than personal finance.

As a staff attorney at the National Consumer Law Center, Anna Anderson has witnessed the same scenario unfold.

Anderson stated that even borrowers who supposedly have access to it, it is still extremely challenging for them to obtain a discharge.

On September 9th, while covering the Finch family's tale, CNBC inquired if Navient had a link to a disability discharge application on its website.

Paul Hartwick, vice president of corporate communications at Navient, wrote in an email the same day, "No."

Navient sold its private student debt portfolio to Mohela, which began servicing it in October. This portfolio includes approximately 2.5 million borrowers. Hartwick stated that the link on the lender's website encouraging struggling borrowers to contact them no longer worked by the time of publication.

Mohela's website, which contained limited information about loan discharge opportunities for those with disabilities, was directed to by Hartwick on CNBC.

A spokesperson for Mohela directed CNBC to Navient in response to a request for comment.

"The spokesperson stated in an email that MOHELA is a service provider for private loans and does not determine the benefits offered by lenders. Each lender/loan holder defines the program attributes and terms."

Federal student loan borrowers can easily apply for disability benefits through the U.S. Department of Education's accessible online application, and find comprehensive information on the website regarding requirements and documentation.

The U.S. Department of Labor discovered that people with disabilities are significantly less likely to be employed than those without disabilities, and the unemployment rate for those with disabilities is much higher, with approximately 13% of Americans reporting a disability, according to Pew Research Center.

Disabled mother and daughter, and a $31,000 debt

Student borrowers often lack a credit history, which is why most private lenders require a co-signer who is equally responsible for the debt.

In 2007, Sabrina, who was in her 30s and studying to become a nurse, was the primary borrower of a Navient private student loan, with her mother, Rebecca, serving as the co-signer.

In the 20 years that followed, both women developed serious health issues.

Sabrina was granted Social Security disability benefits in 2023 due to her bipolar disorder, but she still believed she was responsible for her Navient loan, even though she could no longer work. Despite her efforts to research relief options, she was unable to find any information.

Sabrina spoke to several customer service representatives at Navient for weeks without finding a resolution to her situation. It wasn't until one representative mentioned the disability option that progress was made.

Sabrina said that the next headache was figuring out the proof she needed to gather.

Sabrina sent as much information as she could to the lender, including evidence from her doctors, after only learning the requirements a few weeks later when Navient mailed her documents outlining the needed materials.

In May, Navient excused Sabrina from her private student loan.

Immediately after receiving the news, the loan was transferred to her 85-year-old mother.

Sabrina informed Navient that Rebecca has serious health problems, such as cardiovascular disease, constant pain from a fractured hip, and speech and cognitive issues resulting from several strokes. Sabrina spoke with CNBC on her mother's behalf due to her extensive medical issues.

A Navient customer service agent informed Sabrina that it would be challenging for Rebecca to obtain loan forgiveness.

Sabrina said that she would likely not be excused, regardless of the documents submitted.

Rebecca's private student loan was fully discharged after her disability information was processed, as stated by Hartwick on Oct. 25.

Co-signers are rarely forgiven from private student loans, according to consumer advocates. In 2015, the Consumer Financial Protection Bureau found that private student lenders rejected 90% of co-signer release applications.

Advocates say those odds haven't improved.

Rodriguez of EDCAP stated in August that based on his experience, co-signer release is almost nonexistent in practice.

Rebecca was upset by Navient's earlier attempts to collect her debt, Sabrina stated.

Rebecca's house in Troutville, Virginia, could be at risk of a lien if the lender sues her and one of the callers from Navient mentioned this possibility to Sabrina's mother.

On Aug. 8, a spokesperson for Navient informed CNBC that they couldn't confirm if the lender had discussed the possibility of a lien on Rebecca's house.

"He stated that private student loans typically do not enter collections until a period of delinquency, and that like other loans, there is a process, often lengthy, to take legal action towards repayment."

On July 26, Sabrina sent Navient and CNBC copies of information about her mother's physical condition.

Two weeks after CNBC published an article about the family's experience, Navient informed Rebecca that the lender would release her from the debt.

It was a tremendous relief to her and her mother, Sabrina said.

She is still furious about the challenges she faced while discovering the disability discharge option.

"Sabrina stated that there must be a significant number of disabled individuals struggling to keep up with their loans, and lenders are not providing loan forgiveness options to those seeking assistance."