How to Handle Student Loan Debt When You Can’t Afford Payments

Hey there! Dealing with student loan debt can be really stressful, especially if you’re struggling to make payments. I’ve been there myself, so I wanted to share some tips and options that could help make things more manageable.

First off–don’t panic! There are solutions out there. The key is being proactive and exploring all your options. I’ll walk through some steps you can take if you’re worried about affording your student loan payments.

Contact your loan servicer

If you think you’ll have trouble making payments, the first thing to do is contact your loan servicer directly. Let them know your situation–whether you’re unemployed, dealing with medical bills, or just struggling to pay rent and other expenses. Often, the servicer can help set up an alternative payment plan to make the monthly amount more affordable.

Some options they may offer:

• Lowering your monthly payment amount
• Temporarily stopping payments through deferment or forbearance
• Changing your repayment plan to one based on your income

The earlier you reach out for help, the more options you’ll have. Ignoring the issue and avoiding your servicer’s calls will just make things worse down the road.

Look into income-driven repayment plans

If a standard 10-year repayment plan isn’t feasible for your budget, switching to an income-driven repayment (IDR) plan could really help. These plans base your monthly payment on your annual income and family size. There are a few different options:

• Revised Pay As You Earn (REPAYE)
• Pay As You Earn (PAYE)
• Income-Based Repayment (IBR)
• Income-Contingent Repayment (ICR)

IDR plans can give you more breathing room, and may even lower your payment to $0 per month if your income is low enough. Just keep in mind that switching plans can extend the repayment term, leading to more interest over time.

Ask about deferment or forbearance

If you need immediate relief, deferment and forbearance let you temporarily stop making payments. With deferment, you must qualify based on circumstances like unemployment, economic hardship, or going back to school. Forbearance is available at the discretion of the loan servicer.

These options can prevent you from defaulting on your loans when money is extremely tight. But interest still accrues, so it’s best to use them sparingly.

Consider loan consolidation

Consolidating multiple federal loans into one can simplify repayment. It also gives you access to more repayment plans, including extended plans up to 25 years. Just keep in mind this restarts the clock on loan forgiveness programs.

Look into loan forgiveness

Student loan forgiveness can wipe away your debt after meeting certain criteria. For example:

• Public Service Loan Forgiveness – For government and nonprofit workers after 10 years of payments
• Teacher Loan Forgiveness – Up to $17,500 for teachers in low-income schools
• Total and Permanent Disability Discharge – Federal loans discharged if you become totally disabled

Just beware that qualifying for forgiveness often requires specific circumstances, loan types, and repayment plans.

Explore repayment assistance programs

Some employers, states, schools, and even hospitals offer student loan repayment assistance as an employee benefit. These programs help chip away at your debt each year, making it more manageable. Do some research to see if any organizations you’re affiliated with offer repayment help.

Make interest-only or partial payments

If you can swing it, even small payments can help. Paying just the accruing interest monthly prevents your balance from growing. Or challenge yourself to pay $25 or $50 when possible–every bit counts.

Find ways to supplement your income

Bringing in additional income can give you more breathing room in your budget for student loan payments. A few ideas:

• Get a weekend or evening side gig
• Move to a lower cost area
• Rent out a room in your house
• Sell unused items online
• Ask for a raise at your current job

Even an extra $200 a month could make a difference.

Avoid risky alternatives

When you’re desperate to get rid of student loan debt, shady offers can seem appealing. But steer clear of “debt relief” companies charging expensive fees, or suggesting you pay them instead of your servicer. Those tactics can wreck your credit and lead to collections.

Also avoid offers to consolidate private and federal loans together–you’ll lose access to helpful federal repayment programs.

Talk to a nonprofit credit counselor

If you’re totally overwhelmed, talking to an expert can help. Nonprofit credit counseling agencies like NFCC offer free or low-cost consultations. They can review your full financial situation and explain all your options for addressing student loan debt.

Having an objective third party review everything and walk you through next steps can be a big relief.

Don’t lose hope

I know struggling with student loans is stressful. But try to remember that your debt doesn’t define you, and it’s not a permanent situation. Give yourself credit for doing your best–you’ll get through this! Stay positive and take advantage of every resource available to you.

And remember to reach out for help when you need it. You don’t have to navigate this alone. There are many organizations that offer free student loan counseling and assistance. I’ll list a few great ones below.

Hang in there…you’ve got this! Sending you positive thoughts.

Helpful Resources

• Federal Student Aid – Repayment plans, loan forgiveness, help for defaulted loans
• National Foundation for Credit Counseling – Nonprofit financial counseling
• Consumer Financial Protection Bureau – Managing student debt guidance
• NerdWallet – Student loan repayment articles and calculators