| Strategy | How It Works | Who Qualifies | Benefits | Potential Drawbacks | Real-World Example |
|---|---|---|---|---|---|
| Income-Driven Repayment (IDR) Plans | Monthly payments are based on your income and family size rather than your loan balance. | Federal loan borrowers with eligible loan types. | Lowers payments; remaining balance may be forgiven after 20–25 years. | Total interest paid may be higher over time. | A borrower earning $32k may reduce payments from $350/mo to $45/mo. |
| Loan Forgiveness Programs | Portions of federal loans are forgiven after meeting specific service or employment criteria. | Teachers, government workers, nonprofit employees, healthcare workers, military. | Large amounts forgiven; no tax on PSLF forgiveness. | Must meet strict employment and payment rules. | A nonprofit employee qualifies for PSLF after 120 qualifying IDR payments. |
| Public Service Loan Forgiveness (PSLF) | Forgives remaining federal loan balance after 10 years of qualifying service and payments. | Full-time government or nonprofit employees. | No tax liability on forgiven balance; shortest forgiveness timeline. | Employment type and payment plan must be carefully documented. | A school counselor working in a public high school gets full forgiveness after 120 payments. |
| Teacher Loan Forgiveness | Forgives up to $5,000–$17,500 for teachers in low-income schools. | Full-time teachers with 5 years of service. | Reduces total debt quickly. | Cannot combine the same service years with PSLF. | A math teacher in a Title I school receives $17,500 forgiveness after 5 years. |
| Employer Student Loan Repayment Assistance | Employers contribute directly to loan repayment, often tax-free up to IRS limits. | Employees at companies offering loan repayment benefits. | Free repayment help; reduces overall loan cost. | Not all employers offer programs. | A healthcare employer pays $200/month toward an employee’s federal loans. |
| Borrower Defense to Repayment | Allows forgiveness if your school misled you or broke certain laws. | Students defrauded or misled by their school. | Full loan discharge is possible. | Requires documentation and case review. | Students of a closed for-profit college have loans fully discharged. |
| Closed School Discharge | Federal loans can be discharged if your school closes while you are enrolled or soon after leaving. | Students who could not complete their program due to closure. | 100% discharge of federal loans. | Transfers or “teach-out” programs may affect eligibility. | A student whose nursing program shuts down mid-semester receives full discharge. |
| Total and Permanent Disability (TPD) Discharge | Forgives federal loans for borrowers who cannot work due to disability. | Borrowers with SSA, VA, or physician certification of disability. | Full discharge of federal debt. | Annual income monitoring may be required for 3 years. | A veteran approved as 100% disabled receives full discharge. |
| Refinancing (Private or Federal Loans) | A private lender pays off your existing loans and issues a new loan at a lower interest rate. | Borrowers with good credit and stable income. | Lowers interest rates and monthly payments. | Refinancing federal loans removes federal protections. | Borrower drops from 8.5% to 4.2% interest, saving thousands. |
| Consolidation | Combines multiple federal loans into one loan with a weighted average interest rate. | Federal borrowers with multiple loans. | Simplifies payments; may regain access to IDR plans. | Does not lower interest rate. | Two Stafford Loans merged into one Direct Consolidation Loan. |
| Temporary Forbearance or Deferment | Allows you to temporarily pause payments during financial hardship. | Federal borrowers and some private borrowers. | Prevents default and protects credit. | Interest may continue to accrue. | A borrower pauses payments for 12 months after job loss. |
| Hardship Programs (Private Lenders) | Some private lenders offer reduced payments or interest-only options during hardship. | Private loan borrowers. | Prevents delinquency and default. | Eligibility varies widely by lender. | Private lender offers 6 months of interest-only payments. |
| State-Based Forgiveness Programs | Many states offer forgiveness for nurses, teachers, lawyers, or rural-area professionals. | Residents working in eligible professions. | Reduces debt for in-demand occupations. | May require multi-year service commitments. | A nurse in Oklahoma receives $4,000/year of state forgiveness. |
| Income-Share Agreements (ISAs) | You pay a percentage of your income after graduation instead of interest-based debt. | Students in eligible programs offering ISAs. | Payments adjust with actual income. | May end up costing more for high earners. | A coding bootcamp uses ISAs; borrower pays only once earning $50k+. |
| Bankruptcy (Very Rare Cases) | Student loans may be discharged if proving “undue hardship.” | Borrowers who meet strict legal standards. | Can eliminate large debt loads. | Very difficult to qualify; legal fees. | Borrows in extreme financial hardship win “Brunner Test” case. |
| Strategy | What It Means | When to Use It | Immediate Steps to Take | Pros | Cons | Real-World Example |
|---|---|---|---|---|---|---|
| Contact Your Loan Servicer Immediately | Reach out before missing payments to discuss options and prevent delinquency. | When you know you can’t make the next payment. | Call your servicer, explain the financial hardship, and ask for available relief programs. | Prevents credit damage; opens access to programs. | Servicers may not offer the best advice unless you ask directly. | A borrower facing job loss calls servicer and gets placed into temporary forbearance before missing a payment. |
| Switch to an Income-Driven Repayment (IDR) Plan | Payments are recalculated based on your income—often lowering them significantly. | If your monthly bill is unaffordable due to low income. | Submit an IDR application; report current income. | Payments can drop to $0; keeps loans current. | You may pay more interest over time. | A retail worker’s payment drops from $310/month to $12/month after switching to IDR. |
| Request a Temporary Forbearance | Pauses payments for a short period during financial hardship. | If you temporarily cannot afford any payments. | Apply through your servicer; provide proof of hardship if required. | Protects you from default and collections. | Interest continues to accrue; can increase total cost. | A borrower recovering from surgery pauses payments for 6 months. |
| Request a Deferment | Pauses payments without accruing interest on subsidized federal loans. | If you’re unemployed, in school, or meet specific hardship criteria. | Apply for economic hardship or unemployment deferment. | May avoid interest buildup on subsidized loans. | Unsubsidized loans still accrue interest. | A borrower receiving unemployment benefits qualifies for 12 months of deferment. |
| Rehabilitate Defaulted Federal Loans | Enter a structured payment plan to bring defaulted loans back to good standing. | If your loans are already in default and you want to fix your credit. | Agree to 9 reduced monthly payments based on income. | Removes the default from your credit report upon completion. | Takes 9–10 months; only available once. | Borrower completes rehab with $25/month payments and restores eligibility for federal aid. |
| Consolidate Defaulted Loans | Turns defaulted loans into a new Direct Consolidation Loan. | If you want a faster fix than rehabilitation. | Apply for consolidation and agree to IDR payments. | Restores eligibility for IDR and forgiveness programs. | Default note remains on credit report. | Borrower consolidates defaulted loans in 1–2 months and enters a $0 IDR plan. |
| Check Eligibility for Forgiveness or Cancellation | Certain careers and hardship situations may eliminate part or all of your debt. | If you work in public service, are permanently disabled, or were misled by your school. | Evaluate PSLF, Teacher Forgiveness, TPD, or Borrower Defense. | May eliminate the need for further payments. | Eligibility requirements can be strict. | A nonprofit employee with 10 years of payments receives full PSLF discharge. |
| Enroll in a Financial Hardship Program (Private Loans) | Private lenders may offer reduced payments, temporary interest-only payments, or short-term pauses. | If you have private loans and cannot afford the payment. | Contact the lender and request hardship options. | Prevents delinquency and reduces monthly burden. | Interest still accumulates; options vary by lender. | A private loan borrower receives 6 months of $50 interest-only payments. |
| Refinance (If Your Credit Allows) | Replaces existing loans with a new loan at a lower rate or longer term. | If you can qualify or use a cosigner. | Compare lenders and run soft credit checks. | Can lower monthly payments significantly. | Refinancing federal loans removes federal protections. | Borrower lowers payment from $290 to $150/month with a 15-year refinance. |
| Negotiate a Payment Plan (Private Loans) | Some lenders will renegotiate terms even outside formal programs. | If you’re at risk of default on private loans. | Request lower rate, extended term, or settlement options. | Avoids collections and lawsuits. | Not all lenders agree to negotiate. | A borrower negotiates a reduced fixed interest rate after showing financial hardship. |
| Seek Nonprofit Credit Counseling | Professionals help create a repayment or budgeting plan. | If your debt is overwhelming across multiple areas. | Meet with a certified counselor for a free session. | Provides structure and professional guidance. | Works best when combining several strategies. | Counselor helps borrower prioritize IDR, deferment, and budget adjustments. |
| Avoid Default by Acting Early | Proactive action prevents the severe consequences of default. | If you’re within 30–60 days of missing payments. | Switch to IDR, request forbearance, or modify your plan. | Protects your credit and keeps options open. | Must act before delinquency escalates. | Borrower avoids default by applying for a $0 IDR plan before payments lapse. |
| As a Last Resort: Bankruptcy (Very Rare) | Possible only if you can prove “undue hardship.” | If your situation is extreme and long-term. | Consult a bankruptcy attorney about the Brunner Test. | Can eliminate federal or private debt in rare cases. | Difficult, time-consuming, and not guaranteed. | A borrower with permanent disability wins a hardship discharge in court. |
Many recent college graduates (and not so recent college graduates) are dealing with overwhelming student loan debt. As of 2025, U.S. student loan borrowers collectively owe approximately $1.77 trillion in federal and private student loan debt, with the average borrower (with undergraduate student debt) owing around $29,300.
If you are just considering college for the first time, one of the best ways to avoid student loan debt is to get educated on all of your financial aid options for college (not just student loans). If you have already accumulated student loan debt from college, and are now having a difficult time managing your student loan debt, there is help. For those of you with federal student loan debt, the options are greater, however there are some options out there for dealing with private student loan debt as well.
| Feature | Federal Student Loans | Private Student Loans |
|---|---|---|
| Average Debt per Borrower | $29,000 – $38,000 | $54,000+ (varies widely by lender & program) |
| Interest Rates | 5.50% – 8.05% (fixed) | 4.42% – 15.99% (fixed or variable) |
| Credit Requirements | No credit check (except for Grad/Parent PLUS) | Credit-based (often requires cosigner) |
| Repayment Plans | Income-driven options, PSLF, deferment | Standard or custom; no IDR or forgiveness |
| Loan Forgiveness Eligibility | Yes (PSLF, IDR forgiveness) | No |
| Default Consequences | Wage garnishment, tax refund offset, credit damage | Collections, lawsuits, credit damage |
Depending on what type of student loan debt an individual has, their options for debt relief may be different. Federal student loan debt typically offers the most options for debt relief in the form of alternate and income-based repayment programs, as well as student loan forgiveness programs. For private student loans, the debt relief options tend to be more short-term. Most private student loans will offer a deferment or forbearance option, which can help relive an individual of their monthly payment obligations while unemployed (for example), however some individuals may have the option of consolidating their private student loans, which may provide a more long-term debt relief solution in the form of a more manageable monthly payment amount. Before utilizing a debt relief program or option, be certain to understand the pros and cons associated with it. For example, a student loan consolidation may reduce your monthly student loan payments, however you may end up paying more in interest charges over the lifetime of the loan, or a deferment on your student loans may halt your payments for a period of time, but the interest on your loans will likely capitalize.
Federal student loans come with built-in repayment protections and flexibility that make managing your debt easier than private loans. Whether you’re struggling financially or looking to minimize long-term interest, the U.S. Department of Education offers several repayment options:
This is the default plan. It has fixed monthly payments over 10 years and is best for borrowers who can afford consistent payments and want to pay off their loans quickly with minimal interest.
IDR plans adjust your monthly payment based on your income and family size. These plans are ideal for borrowers with low or variable income and include:
Under these plans, any remaining balance may be forgiven after 20–25 years of qualifying payments.
Borrowers working in qualifying nonprofit or government jobs may be eligible for forgiveness after making 120 qualifying payments under an IDR plan.
These plans stretch repayment over up to 25 years and may start with lower monthly payments that increase over time — ideal for those who expect their income to rise.
If you’re facing temporary financial hardship, you may be eligible to pause your federal student loan payments through deferment or forbearance. However, interest may still accrue during these periods.
Unlike federal loans, private student loans are issued by banks, credit unions, and online lenders — and they don’t come with government protections like forgiveness or IDR plans. That said, you still have some options for managing private loan debt:
Most private lenders offer fixed monthly payment plans over 5, 10, or 15 years. Some allow interest-only payments while you’re in school or during a grace period after graduation.
Student loan refinancing is the most powerful way to manage private loan debt — especially if you have good credit or a strong cosigner. When you refinance, you’re taking out a new loan with a private lender to pay off one or more existing loans, ideally at a lower interest rate.
Keep in mind: Once you refinance federal loans into a private loan, you lose access to federal repayment and forgiveness programs — so only refinance federal loans if you’re sure you won’t need those protections.
Some private lenders offer temporary relief during unemployment or financial hardship, but it varies by lender. Contact your servicer to ask about deferment, forbearance, or payment flexibility options.
If you originally took out a private loan with a cosigner, some lenders allow you to remove them from the loan after making a certain number of on-time payments — typically 12 to 36 months.
If you’re reading this, it’s likely you’re feeling the weight of student loan debt and wondering what to do if you just can’t make those payments. Trust me, you’re not alone. Life happens—whether it’s a job loss, medical emergency, or unexpected financial curveball. The good news? There are options, and the sooner you take action, the better.
First things first: don’t bury your head in the sand. If you’re having trouble making payments, you need to get in touch with your student loan servicer (the company handling your loan). They’re there to help, and many are willing to work with borrowers who are struggling. It’s much better to let them know upfront than risk your account going into default.
Pro Tip: Keep your communication clear and honest. Be upfront about your situation and let them know if you’ve hit a rough patch. They might offer deferment, forbearance, or a more manageable payment plan.
Your loan servicer has a variety of repayment plans at their disposal. Some might lower your monthly payment to something more manageable. For instance, you might qualify for income-driven repayment (IDR) plans, which base your payments on your income. If your financial situation is tight, you could also look into consolidating your loans, which might make things easier by combining multiple loans into one monthly payment.
Pro Tip: Take the time to understand your repayment options. Different loans (federal vs. private) have different terms, so knowing your options will put you in the driver’s seat when it comes to managing your debt.
If you’re temporarily struggling and need a breather, don’t hesitate to ask your loan servicer about deferment or forbearance. These are temporary pauses on payments, but they come with different terms. Deferment typically allows you to pause payments without your loan going into default, and in some cases, you won’t even accrue interest during that period. Forbearance, on the other hand, may still allow for interest to accrue, but it’s another option to buy you some time.
Pro Tip: While deferment sounds great, remember that forbearance might end up costing you more in the long run because interest keeps piling up. Make sure you understand the pros and cons before you decide.
Once you’ve worked out an arrangement with your servicer, it’s time to show some good faith. Follow through with everything you’ve agreed upon—whether it’s sending in forms or making payments on time. If you hit another snag, keep the lines of communication open. Ignoring your loans is the quickest way to spiral into default, so stay proactive and be responsive.
Pro Tip: Don’t be afraid to ask for help if you’re confused about paperwork or terms. There are nonprofit credit counseling agencies that can assist you for free or low-cost.
If you miss a payment or can’t make the one you promised, contact your servicer immediately. The earlier you reach out, the more options you have. If you let too much time pass, you risk defaulting on your loan, which can have long-lasting consequences on your credit score and your financial future. Stay ahead of the game by getting in touch at the first sign of trouble.
Pro Tip: If you’re having trouble keeping track of due dates, set up automatic payments or alerts to make sure you never miss one.
Life can get overwhelming when it feels like you’re drowning in student loan debt, but there’s always a way out. By reaching out to your loan servicer, reviewing your repayment options, and being proactive, you can make your payments more manageable. And if things get really tough, there are temporary solutions like deferment or forbearance that can buy you some time. Whatever you do, just make sure you don’t ignore the problem. The sooner you address it, the easier it’ll be to find a solution that works for you.
Not repaying your student loans or simply ignoring the student loan payments, should be avoided at all costs. Borrowers who can not afford to pay back their student loans, should contact their student loan lenders immediately to find out their options. There are some federal programs set up to aid qualified borrowers in the repayment of their student loans, and some private student loan lenders may be willing to work with their borrowers who are willing to put forth a good faith effort. Ignoring student loan payments can result in the following actions being taken:
1. Your loans may be turned over to a collection agency. You’ll be liable for the costs associated with collecting your loan, including court costs and attorney fees.
2. You can be sued for the entire amount of your student loans. Your wages may be garnished. Your federal and state income tax refunds may be intercepted. The federal government may withhold part of your Social Security benefit payments.
3. Your defaulted loans will appear on your credit record, making it difficult for you to obtain an auto loan, mortgage, or even credit cards. A bad credit record can also harm your ability to find a job.
4. You won’t receive any more federal financial aid until you repay the loan in full or make arrangements to repay what you already owe and make at least six consecutive, on-time monthly payments. (You will also be ineligible for assistance under most federal benefit programs). You’ll be ineligible for student loan deferments. Subsidized interest benefits will be denied.
5. You may not be able to renew a professional license you hold.
6. You may be prohibited from enlisting in the armed forces.
Fast. Free. No Hidden Promotions. Just Smarter Refinance Insights.
Explore our Student Loan Debt article database to find the answers you need. CollegeWhale.com has been a trusted source for college financial aid information for nearly 2 decades! We have been on a mission to connect students (and parents) with free money for college and FAFSA facts, and we haven't stopped yet!
An Unpopular Opinion: Do Not Take Out Loans for College Unless You Have Your Major and Career Path Set For decades, society has painted a clear...
Student Loan Debt10 Strategies to Reduce Your Student Loan Debt Reducing student loan debt doesn’t happen overnight, but with the right combination of planning,...
Student Loan DebtQ: I am out of work with an injury, and can no longer afford to pay my private student loans. There is no forbearance left on my loans, I am...
Student Loan DebtQ: I am unemployed and can't pay student loans back at this time. I need help figuring out how to suspend these student loan payments or avoid having...
Student Loan DebtStudent Loan Debt Relief: What You Need to Know Student loan debt is a common struggle for many students and graduates. Whether you’re facing large...
Student Loan DebtQ: How much student loan debt is too much? More specifically, how much should a student take out in student loans, so that the debt will be...
Student Loan DebtQ: When do I pay back my student loans, and will I be notified before I need to start making my student loan payments? A: The date that a borrower...
Student Loan DebtQ: If I dropout of college before I graduate from my degree program, will I have to pay back the federal student loans I used for that program? A:...
Student Loan DebtFor those on the edge of student loan default, it is crucial to avoid default if at all possible. Defaulted student loans can severely affect all...
Student Loan DebtQ: If I have both private and federal student loans, and have the ability to pay off a few student loans completely, should I pay off the private...
Student Loan DebtQ: If I could get a home equity loan to pay off my large amount of student loan debt, would this be a good option? A: It’s a tempting idea—using...
Student Loan DebtQ: For current college graduates who are still unemployed and facing upcoming student loan payments, what are some of the pros and cons of student...
Student Loan DebtStudent Loan Forgiveness Programs are federal programs that qualified applicants may apply for to have part or all of their student loans canceled...
Student Loan DebtIf you’re like most college graduates, you’ve probably left campus with more than just your diploma—you’ve got student loan debt tagging...
Student Loan DebtQ: What is student loan garnishment, and should I worry about it if my student loans are going into default because I cannot afford them? A:...
Student Loan DebtGraduating college is a big win, but let’s be honest—if student loans funded your journey, the post-graduation reality might feel like a...
Student Loan DebtLet’s face it: student loan debt can feel like a massive, never-ending weight. But if you’re juggling federal student loans and feeling...
Student Loan DebtIf you're currently in college, there's a good chance you're already accumulating student loan debt. While it may seem like a distant worry while...
Student Loan DebtUnderstanding Student Loan Delinquency and Default When it comes to student loan debt, we all know that the struggle can feel real. You've borrowed...
Student Loan DebtHow to Get Back on Track with Student Loan Repayment After Default If you’ve fallen behind on your student loans and defaulted, don’t...
Student Loan DebtStudent Loan Deferment Options: A Guide to Temporarily Pausing Your Payments Student loan deferment options can vary based on the type of loan you...
Student Loan DebtOnce you graduate from college, it is not typical for you to have to begin repaying your student loans immediately. Most student loans have a buffer...
Student Loan DebtQ: I just received a statement for tax purposes on my private student loans. I am currently in forbearance on the private student loans, and I...
Student Loan DebtOften times, the key to avoiding too much student loan debt is understanding how much student loan debt you can safely afford to take on. Below you...
Student Loan DebtThe topic of bankruptcy and student loans can be difficult to generalize since every individual’s debt circumstance can be different. For this...
Student Loan DebtQ: Can I start paying back my student loans during the grace period, or do I have to wait until the grace period is over? A: If you are able to...
Student Loan Debt5 Simple Tips to Keep Your Student Loan Debt Under Control If you’re like most recent college grads, you probably left school with a nice chunk of...
Student Loan DebtPaying back student loans can be difficult, especially if you are a recent grad who has failed to find a job, or if you have been laid off recently....
Student Loan DebtQ: I am returning back to college after not attending for quite sometime. I have been paying back my student loans from when I did attend, but I am...
Student Loan DebtReducing Student Loan Debt Before or While Attending College Managing student loan debt doesn’t have to be overwhelming. Whether you’re preparing...
Student Loan Debt