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What to do if you can’t pay your student loans

5 options to make repayments more affordable and avoid default.

Updated

Unlike most other types of debt, you have several options if you’re struggling to afford your student loan payments. While federal loans are the most flexible, there are also a few ways to make your private loans more affordable. If you’ve already considered these options and are still struggling, you might want to get personalized advice from a credit counselor.

1. Sign up for income-driven repayments

  • Best for: Federal loans when you have a high debt load, low income or both.

Most federal loans are eligible for repayments based on your income. Income-driven repayment (IDR) plans can make your monthly cost a lot more affordable if you’re in a low-paying job or have too much debt to afford repayments on a regular plan.

If your income is low enough, your repayments could be $0. And the government forgives what’s left after 20 or 25 years.

But think carefully before you sign up. If you decide to switch out of one of these plans, your interest capitalizes. This means interest that your repayments didn’t cover gets added to your loan balance, making your loan more expensive.

If you’re certain you’ll see it through to the end, you can apply for an IDR plan on the Federal Student Aid website by filling out an online form or sending in a paper application by mail. You need to divulge your income each year to stay eligible.

2. Switch to an extended repayment plan

  • Best for: Federal loans when you have a high income or might want to switch repayment plans again.

Income-driven repayments aren’t right for everyone. If you’ve been hit with other expenses — like you have to pay for an unexpected medical procedure out of pocket — a repayment plan with a longer term might be a better option. It also might be a good choice if you plan on switching plans down the road.

You might want to pick the Extended Repayment Plan, which stretches out your loan repayments over 25 years. Or go for the Extended Graduated Repayment Plan, which gives you repayments that start low and increase every two years over a 25-year term. While this plan might be more affordable in the short term, it’s one of the most expensive repayment options available for federal loans.

3. Ask your servicer for a longer term

  • Best for: Private loans when your income is too low to afford monthly repayments.

While federal loan terms aren’t negotiable, private loans come with a little more unofficial wiggle room. If you’re struggling to make repayments, reach out to your servicer before you miss a repayment.

Explain you’re worried about defaulting and ask if you can lengthen your loan term. Use a calculator beforehand to find out what kind of term length would be affordable for you.

If you’d need a term longer than 20 years, ask if it’s possible to make repayments based on your income. Most lenders don’t offer income-driven repayments officially, but some might make an exception in extreme situations.

4. Apply for deferment or forbearance

  • Best for: Federal and private loans when you’re facing a brief financial setback.

If you’re unable to afford repayments right now — say you’re unemployed or have returned to school full time — deferment or forbearance allows you to pause repayments altogether. Federal loans come with more deferment and forbearance options, but most private lenders offer hardship deferment at the very least. Service members can also usually pause repayments when they go on active duty.

But only use this option if it’s absolutely necessary. Similar to the IDR plans, all unpaid interest capitalizes once you start making repayments again. And since you’ll have a higher balance and shorter term, this means higher monthly repayments on top of a higher loan cost.

5. Refinance with another lender

  • Best for: Private loans when you can’t negotiate a longer term and have a cosigner willing to help.

If your lender isn’t willing to budge on your private student loan term, you might want to trade it in for a new loan with another lender. But if you’re struggling to afford repayments, you’ll likely need to apply with a cosigner to qualify for a better deal. If your cosigner is hesitant to take on that responsibility, look for a lender that offers cosigner release after a few years of on-time repayments.

You might want to stay away from refinancing federal loans, however. You’ll lose access to federal benefits — like all those repayment plans and forgiveness options — that you might want to take advantage of down the road.

Compare student loan refinancing offers

Data indicated here is updated regularly
Name Product Min. Credit Score Max. Loan Amount APR
Discover Private Consolidation Loan
Good to excellent credit
$150,000
2.80% to 12.49%
Splash Financial Student Loan Refinancing
660
None
Starting at 1.89%
Save on your student loans with this market-leading newcomer.
Credible Student Loan Refinancing
Good to excellent credit
None
1.99% to 9.24%
Get prequalified offers from top student loan refinancing providers in one place.
Education Loan Finance Student Loan Refinancing
680
None
2.39% to 5.99%
Lower your student debt costs with manageable payments, affordable rates and flexible terms.
Earnest Student Loan Refinancing
650
$500,000
1.99% to 5.64%
Get a tailored interest rate and repayment plan with no hidden fees.
SoFi Student Loan Refinancing Variable Rate (with Autopay)
650
Full balance of your qualified education loans
2.25% to 6.09%
A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
Purefy Student Loan Refinancing (Variable Rate)
620
$300,000
2.27% to 7.49%
Refinance all types of student loans — including federal and parent PLUS loans.
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Compare up to 4 providers

Still need help? Consider credit counseling

When you’ve exhausted all of your options — or think you have — credit counseling might be your next step. Set up a meeting to go over your finances and come up with a plan to manage all of your debts — not just your student loans. You can find a list of government-approved nonprofit credit counseling agencies on the US Department of Justice’s website.

Can I get my student loans canceled through bankruptcy?

You might be able to, though it’s not as simple as discharging other types of debt. That’s because current law requires you to prove that your loan repayments would cause you undue hardship. Read our guide to discharging student loans in bankruptcy if you think it’s your only option.

Bottom line

There are multiple ways to adjust your student loan repayments if they fall outside of your budget — even if you have private loans. Which option is best for you depends on your circumstances. You can learn more about how it all works by checking out our guide to student loans.

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