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Let’s be real – student loan debt is absolutely crushing millions of Americans. The numbers are staggering – over 43 million borrowers owe a combined $1.6 trillion in student debt. According to a 2022 report, the average student borrower owes over $37,000 after graduating.And that’s just the averages. I’ve talked to so many people who are saddled with six-figure student loan balances from getting advanced degrees. It’s absolutely insane.The worst part? Even if you can’t find a decent job or your income takes a hit, those student loans aren’t going away. Interest keeps piling up, and the debt can quickly become overwhelming. I’ve had people in tears on my show talking about their student loans – it’s a huge source of stress, anxiety and shame.So if you’ve found yourself in a situation where you have little to no income but those student loan bills keep coming, what can you do? Don’t worry, I’ve got your back. Here are some tips to deal with this difficult situation:

Understand Your Repayment Options

The first step is knowing what kinds of repayment plans are out there for federal student loans when your income is little to none. The government actually has some decent options if you qualify:

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Income-Driven Repayment Plans

  • Income-Based Repayment (IBR) – Caps payments at 15% of discretionary income and forgives remaining balance after 25 years
  • Pay As You Earn (PAYE) – Caps payments at 10% of discretionary income and forgives balance after 20 years
  • Revised Pay As You Earn (REPAYE) – Same 10% cap as PAYE but no income eligibility requirement

The great thing about these plans is that your payment can be as low as $0 if your income is very low or non-existent. Yes, interest will still accrue – but at least you won’t go into default.Just keep in mind that any forgiven amount at the end is considered taxable income. But we’ll cross that bridge when we get there.

Extended Repayment

Extends the standard 10-year repayment period up to 25 years to lower your monthly payments. Not as generous as income-driven plans, but an option if you don’t qualify for those.

Deferment and Forbearance

Allows you to temporarily postpone making payments if you meet certain criteria like economic hardship or unemployment. Interest still accrues though, so not ideal for long-term.The key is being proactive and submitting that income-driven repayment application ASAP if your income has taken a hit. Don’t just stop paying and go into default – that way lies disaster.

What If You Have Private Loans?

I won’t lie, things get trickier if you have private student loans from a bank or lender. They aren’t required to offer any of those income-driven or extended repayment options.Your best bet is to be upfront with your lender about your situation and see if they can offer any kind of economic hardship plan or interest rate reduction. Some may be willing to work with you temporarily, but don’t count on it.If they won’t budge, you may need to consider more drastic measures like student loan debt settlement or even bankruptcy (though that’s extremely difficult for student loans).No matter what though, do NOT default on those private loans. Your lender can go after your wages, tax refunds, and even come after any assets or cosigners on the loans. It’s an absolute nightmare.

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Boost Your Income Any Way You Can

Okay, this one is obvious – but if you have zero income, you need to do whatever you can to start bringing in some cash flow. Every little bit helps when it comes to making those minimum payments.

  • Look for side gigs like driving for a rideshare service, freelance work, etc.
  • Sell stuff you don’t need on eBay, Craigslist or Facebook Marketplace
  • Get a part-time job, even if it’s not in your desired field
  • Ask about cash payments for odd jobs from friends/family
  • Monetize a hobby like arts & crafts if you can

The goal is to show your lender you’re making an effort. That will go a long way if you need to request any kind of hardship assistance down the road.And who knows, maybe that side hustle turns into something more! I’ve had guests who ended up replacing their full-time income with multiple side gigs.

Look Into Loan Forgiveness Programs

Depending on your career and specific situation, you may qualify for one of the federal student loan forgiveness programs:Public Service Loan Forgiveness (PSLF) – If you work full-time for the government or a 501(c)(3) non-profit, you can have your remaining Direct Loan balance forgiven tax-free after making 120 qualifying payments.Teacher Loan Forgiveness – Teachers who work in low-income schools for 5 consecutive years can get up to $17,500 in Direct or Stafford loans forgiven.Other profession-specific programs – There are forgiveness options for nurses, lawyers in public service, AmeriCorps volunteers and more.The key is doing your research and submitting that employment certification paperwork ASAP if you think you may qualify. Don’t sleep on these programs – that’s free money!

Consider Relocating for Lower Cost of Living

Look, I get it – you went to school in an expensive city and that’s where all the jobs in your field are. But if you literally have zero income, you may need to consider relocating somewhere with a much lower cost of living.Think about it – if you can move back home with your parents for awhile or to an area with cheap rent, your minimal income can go a lot further towards paying those student loans. Every dollar counts when you’re broke.It’s not an ideal situation, but sometimes you gotta do what you gotta do to get out of debt. Don’t rule it out, especially if you’re young and flexible.

Seek Help From Nonprofits and Your Alumni Association

You’d be surprised at the resources that are out there to help borrowers manage their student debt. Nonprofit organizations like:

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They can provide free advice on your options and even legal assistance if you’re getting the runaround from your lender or servicer.Don’t forget to also check with your alma mater’s alumni association. Many universities have dedicated staff to help former students with financial issues like student loans, unemployment, etc.

Stay on Top of Any Loan Forgiveness Developments

Let’s be honest, the student loan situation in this country is a mess. But there’s a lot of momentum around trying to fix it through legislation and executive action.President Biden has extended the student loan payment pause several times already. And there’s still a chance some type of broad student loan forgiveness gets approved, though the future is uncertain.My advice? Don’t count on it happening, but stay informed. Subscribe to updates from the Department of Education and follow reputable sources reporting on any developments. If loan forgiveness opportunities open up that you qualify for, you’ll want to apply ASAP.The bottom line is that your student loans aren’t going away if you have no income. But you do have options to hopefully avoid default and the severe credit damage that comes with it.Be proactive, look into all your repayment plans, and get help if you need it. This may be a temporary setback, but I know you’ve got this. Sending you all my best!

Frequently Asked Questions on Paying Student Loans With No Income

What if I’ve already defaulted on my student loans?Don’t panic, you still have options to get out of default:

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  • Loan rehabilitation – Make 9 affordable payments to have the default removed from your credit report
  • Loan consolidation – Combine your defaulted loans into a new Direct Consolidation Loan
  • Negotiate a settlement – Some lenders may accept a lump sum that’s less than the full balance

Getting out of default should be your #1 priority, as it gives you access to flexible repayment plans and forgiveness programs again. This guide from the Student Borrower Protection Center has great info.Can I pause my payments if I go back to school?Yes! If you enroll at least half-time in an eligible program, you can request an in-school deferment on your existing loans to postpone payments until you graduate (or drop below half-time again).Just be aware that interest will still accrue on any unsubsidized loans during this time. But it at least provides temporary relief while you invest in your education.What if my spouse has income – do I have to include that?For income-driven repayment plans, you generally only have to report your individual income – not your spouse’s. So if your spouse is the primary breadwinner, your payment could potentially be $0 based on your income alone.However, you do have the option to count your combined household income, which may result in a higher payment. It’s up to you which method yields the lowest payment amount.I’m on disability – what are my options?If you have a significant, permanent disability, you may qualify for Total and Permanent Disability (TPD) discharge of your federal student loans. This forgives the remaining balance without having to make any more payments.The criteria is strict, but it’s worth exploring if your disability prevents you from working. You’ll need documentation from the Social Security Administration, VA or a physician.What if I’m self-employed or have variable income?Income-driven plans calculate your payment based on your Adjusted Gross Income from your most recent federal tax return. So if you have a year with very low or no income, your payment will reflect that.Just be sure to recertify your income annually, as your payment amount can adjust up or down each year based on your latest tax info.

Key Takeaways

Okay, let’s do a quick recap:

  • Explore income-driven repayment plans – These can reduce your payment to $0 if you have no income
  • Look into loan forgiveness programs – Certain careers like teaching, public service, nursing, etc. may qualify
  • Boost income any way you can – Side gigs, part-time work, selling items – every bit helps
  • Consider relocating – Moving somewhere with lower costs could make minimal income go further
  • Stay on top of any forgiveness developments – Changes may open up new opportunities
  • Don’t ignore the problem – Defaulting makes everything worse, so be proactive

I know dealing with student loans when you’re broke is incredibly stressful. But you’ve got this. Follow the tips above, don’t be afraid to ask for help, and take it one step at a time.

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