3 Options to Consider if You Can’t Afford Your Student Loan Payment

Frustrated man - 3 Things You Should Do If You Can't Afford Your Student LoansThe U.S. Department of Education offers a number of affordable repayment options for borrowers who are struggling to pay back their student loans. The important thing to remember about all the options below is that it’s completely free to apply! Also, if you ever have questions or need FREE advice about your student loans, you can always contact your Department of Education loan servicer.

1. Switch Your Repayment Plan

You may be able to lower your monthly student loan payment by switching to a different repayment plan. Use this calculator to compare what your monthly payment amount could be if you switched your plan.

If you don’t pick a different plan when entering repayment, you are automatically enrolled in the 10-year Standard Repayment Plan. However, many borrowers don’t realize that you can switch your plan at any time by contacting your loan servicer.

One of the most popular options for borrowers who are looking to lower their payments is the income-driven repayment plans.

We offer three income-driven repayment plans:

  1. Pay As You Earn
  2. Income-Based
  3. Income-Contingent


  • Your monthly payment will be a percentage of your income. Depending on the plan, that may be 10% or 15% of your discretionary income, or something else. What you ultimately pay depends on the plan you choose and when you borrowed, but in all cases, it should be something you can afford.
  • Your monthly payment amount will be lower than it would be under the 10-Year Standard Repayment Plan if you qualify to make payments based on your income. In fact, it could be as low as $0 per month!
  • Any remaining balance on your loans is forgiven if your federal student loans are not fully repaid at the end of the repayment period (20 or 25 years).

Income-driven repayment plans are a great option if you need lower monthly payments. However, like all benefits, there are also costs. All of these benefits will ultimately increase the amount of interest you pay over time. The income-driven repayment plans also have tax consequences for any forgiveness received.

Apply for an income-driven repayment plan now

If one of the income-driven repayment plans is not a good option for you, we offer other options. Your servicer can help you identify the best plan to fit your needs.

2. Consolidate your Student Loans

Loan consolidation can simplify your payments by combining multiple federal student loans into one loan. Consolidation can also lower your monthly payment.


  • Can lower your monthly payment by extending your repayment period (spreading your payment out over more years). The repayment term ranges from 10 to 30 years, depending on the amount of your consolidation loan, your other education loan debt, and the repayment plan you select.
  • Will allow you to qualify for additional repayment options. If you have FFEL or Direct PLUS Loans, consolidating your loans into a Direct Consolidation Loan will allow you to qualify for additional repayment plans, such as the Pay As You Earn or Income-Contingent Repayment Plans, that you wouldn’t have qualified for if you hadn’t consolidated.
  • Your variable interest rate loans will switch to a fixed interest rate. It’s important to note that consolidation will lock-in interest rates on variable-rate loans, but will not lower them further. This would be a benefit if, like now, interest rates are low.

The benefits listed could provide relief to some borrowers. However, it’s important that you also weigh the costs before consolidating. For example, because you’re restarting and possibly extending your repayment period, you’ll pay more interest over time. Additionally, you may lose borrower benefits, such as interest rate discounts and loan cancellation benefits, offered with the original loans.

Apply for a direct consolidation loan now

3. Postpone your Payments

Under certain circumstances, you can receive a deferment or forbearance that allows you to temporarily postpone or reduce your federal student loan payments.

Deferment and forbearance may be a good option for you if you are temporarily having a difficult time paying back your student loans. Deferment and forbearance are not good long-term solutions. If you think you’ll have trouble paying back your loans for more than a year or you’re uncertain, you should consider an income-driven repayment plan or consolidation.


  • You do not need to make student loan payments during a deferment or forbearance.
  • The federal government may pay the interest on your loan during a period of deferment. This depends on the type of loans you have.

Again, deferment and forbearance are not good long-term solutions for borrowers who are struggling to pay back their student loans. Some reasons why:

  • With a deferment, interest will continue to be charged on your unsubsidized loans (or on any PLUS loans).
  • With a forbearance, interest will continue to be charged on all loan types, including subsidized loans.
  • The interest you accrue during periods of deferment or forbearance may be capitalized (added to your principal balance), and the amount you pay in the future will be higher.

If you can, you should consider making interest payments on your loans during periods of deferment or forbearance

To request a deferment or forbearance, contact your loan servicer

If you need help deciding which of these options is best for you, contact your loan servicer. They can help you weigh the different options based on your unique situation.

Nicole Callahan is a Digital Engagement Strategist at Federal Student Aid.


  1. I Graduated from Corinthian /FMU/Everest College on March 2008 in Tampa Florida. I worked full time and went to school full time while being a single parent. I worked really hard to maintain my grades in hope to have a job as the school and advertisement suggested once I graduated.
    When I had enrolled the school was named FMU Florida Metropolitan University under Corinthian College when I graduated it had changed from FMU to Everest. I worked for several years with temporary agency while in school on long term assignment as account receivable rep. The last assignment ended and I was not able to get another position anywhere, with a child to take care of and a mortgage and home to up keep unemployment was not enough. I put my loan in forbearance and then deferment for 7 years since I graduated. I have been trying to find a good job I am told my degree is not accredited and I am over looked. I have been paying my private loan for the last 3 years. I was encouraged to take this loan out the last year of school in order for me to graduate. 2008 was the year I graduated lost my home and ended up In Maryland to seek employment. I worked for employment agency convenient store I am in debt of $66,729.00 from school loans today with Salliemae now Navient.

    I am seeking loan forgiveness due to all i have been told from the school have been false and it is unfair that I pay while the School filed bankruptcy and all is forgiven for a for profit institution. This school lied to make a profit while, I personally suffered. I hope the department clarifies this information and makes it easier for students to apply for the defense of repayment.

    Please advice.

  2. My dilemma is I can’t afford payments on my loan. I’ve exceeded doing forbearance. I can only work half time because I now have a child on the spectrum who needs me in his classroom and home. This was obviously an unexpected situation after graduating and having my son.
    I now have a letter that my wages will be garnished. Is there anything else I can do besides a payment plan?
    I’m desperate.

    • Hi. Have you gone into default already? If so, contact ED’s Default Resolution Group (1-800-621-3115) to learn about your options for getting out of default. You can learn about those options here: https://studentaid.ed.gov/sa/repay-loans/default/get-out. If you have not gone into default yet, you should contact you servicer immediately: https://studentaid.ed.gov/sa/repay-loans/understand/servicers. They can explain what your options are. Please reach out. We are here to help.

      • I received a letter stating notice of proposed treasury offset against all payment streams authorized by law. I’m suppose to call a number to make repayments options to avoid offset.
        Sorry it’s all confusing to me.

    • I received a letter stating notice of proposed treasury offset against all payment streams authorized by law. I’m suppose to call a number to make repayments options to avoid offset.
      Sorry it’s all confusing to me.

      • Yes. Please call the number as soon as possible, Claudia. You can also contact contact ED’s Default Resolution Group (1-800-621-3115) and they can help you. Do it as soon as possible though to avoid having your wages garnished. There are options for you! You just have to call immediately.


  4. bC1VNO I am so happy to read this. This is the kind of manual that needs to be given and not the accidental misinformation that is at the other blogs. Appreciate your sharing this best doc.

  5. ….”based on income” but how does the income based options work if you’re making more money now ($9000/ year more) then you did at your previous job, but in reality your take home is pay is still about the same. What options can I use?

  6. As a financial aid advisor I face a dilemma with these plans. With Pay As You Earn and Income Based Repayment plans available, what incentive does the student have to borrow less than the maximum amount possible? Once a student’s loan balance has exceeded their ability to repay, why should they stop borrowing?

    • Hi Ben,

      Have you encouraged your students to use the Financial Awareness Counseling Tool or the Repayment Estimator before accepting additional loans? It is difficult to comprehend those large sums, but when you break it down to how much it could increase their monthly payment when they graduate, it makes a big difference. How many iPads or cell phone bills could they pay with the amount they’d save by not borrowing more than they need? Income-driven plans are a great option for borrowers who are struggling, but you can also remind students of the extra interest they will pay over time should they decide to take advantage of one of these plans. Thanks for the feedback.



      • Yes. That argument works for the standard payment plans, but because their payment is capped at 10-15 percent of discretionary income under IBR or PAYE, they are insulated from facing the full cost of their loans – whether they pay any principal or not, the rest is forgiven at the end. They face little risk so it is a harder argument to make. Whether they owe $50K, $100K, $300K or $500K, they pay the same monthly payment.

  7. Good morning,

    If possible to obtain this information in spanish? thank you


    Marilyn Rivera

  8. Nicole, Is there any new information on when or if borrows with older loans prior to Oct 2007 would be eligible for the “Revised Pay as you Earn” that would lower the 15% to 10% of discretionary income? I know there is supposed to be a public comment this summer on the proposed regulations that will affect loans prior to Oct 2007 but I’m not sure when that is. I would like to participate in the public comment. As a graduate student, I have been unable to find a job in the past few years due to economic conditions/uncertainty and my consolidated student loan is amortizing interest to the point that repayment even with a job would become extraordinarily difficult at 15% of AGI.

  9. The Federal government should be neutral, respecting all its citizens’ differing opinions and views. Changing the USDOE’s official twitter logo to the colora rainbow showing solidarity to the homosexual community ostracizes those who are opposed to the same-gender marriage ruling. Please remain neutral and respect all citizens in an equal manner. Thank you

  10. I really have a question. If your check is being garnished for student loans, where is the money going? Is going towards the repayment of the loans? Or is it being simply withheld?
    thank you for your time

    • You will need to contact your loan servicer to find out whether the amount withheld is covering principal and interest or just interest and collection fees. Depending on how long your loans were in a non-repayment status, there could be a significant amount of built up interest and collection fees added into your loan balance in which case the garnishment is going toward that and may not be going towards principal.

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