What if You Can’t Afford Your Student Loan Payment

Jul 21

Students who had to take loans to be able to go to university usually have to return the money they have borrowed. Like in any other loan-related situation, there is no mercy and the conditions are the ones that you agreed to when you signed the contract. However, you could try asking for different conditions if your financial situation deteriorates.

Change the Tempo

When you sign an agreement or a contract, you accept the terms and conditions defined in it. So, from the moment you agreed to the payment plan the loaner offered you, it is necessary that you keep paying the monthly amount on a regular basis. But if you have finished your studies and cannot find a job or have some personal problems, you can ask for a different payment tempo. For instance, if your loan is supposed to be returned in ten years, you could ask for a 13- or 15-year period. The downside of this option is that the overall amount you pay for the interest rates will be higher than in the original plan, due to the prolongation.

Apply for the IBR (income-based repayment)

If you are among those lucky people who have managed to find a job, but the income you receive is low, you can get into the income-based-repayment program. The advantage of this strategy is that your installment will not take more than 15% of your income. It will give you more financial space to organize your life. However, the period of payment will be longer and the interest rates will eat more of your money.


Bear in mind that this program is eligible only for federal loans. Learn about the difference between private and federal loans.

Analyze the Situation

Let’s say that your requests were declined and that you have found yourself in a pretty unpleasant situation; your loan is waiting and your income remains scarce. Now you have to use your brain, since the brain is the reason why you studied in the first place. If you’re really struggling to pay your student loan back, you might think about refinancing your current loan. This way you should be able to make smaller repayments that you can actually afford. You can find out more about refinancing by looking at additional info online. Can you move to another town and get a better job? How can you start doing a side job? Maybe you should retrain and begin a different career. Also, asking for professional help for student loan payment plans could be a reasonable move. The key thing here is that you start doing things to change your current situation.

Take Part in Socially Beneficial Actions

In some cases the federal government is ready to forgive you the remaining amount of loaned money if you contribute to the welfare of the community or the state in general. To be eligible for such a treatment, you could join the Army. They always need new people. Similarly to that, you could apply for the Peace Corps. Even if your loan is not forgiven, you will have a fair and steady income, which will enable you to pay your borrowing without and difficulties.


Move to States Offering Forgiveness

Some professions, mostly related to health and education, will make you forgiveness-friendly, debt-wise. The conditions can vary from state to state, so the local authorities might offer you to cover the remaining part of your loan if they desperately need your profession. Since the overall share of student loans is the second highest in the US (right behind mortgages), there is a national consensus that people who agree to work in passive areas or do socially sensitive jobs will be offered forgiveness or their debts will be partially paid by the state or federal government.

So, if you see that you are developing inability to return the money you have borrowed, react at once and go for any of the solutions we have described here. You could solve your problem successfully and then finally start living the life you dreamt of when you started your studies and took the loan.