Having trouble paying off your student loan? Here’s what to do



If you are unable to make a payment, you have options. (iStock)

Paying for college is not easy. US student loan debt is at an all-time high of over $ 1.5 trillion. For borrowers dealing with these tuition debt, repayments can be onerous – especially during a pandemic that is rife with job losses and economic shutdown.

Fortunately, the CARES Act has offered some emergency relief, at least for federal loan borrowers. The March 2020 Loan Relief measure allows borrowers to pause student loan payments – interest-free – until September 30, 2021.


However, this is not the only option that those with loan repayment problems have. If you find it difficult to make your monthly student loan payments after graduation, one of the following repayment strategies and options may help you.


The patience that CARES Act technically offers allows borrowers to withhold payment due to difficulties. Abstinence is available on both federal and private student loans, and typically the borrower pays all or most of the interest accrued during the suspended period.

Borrowers can either pay interest as it accumulates (monthly) or add it to the loan balance, which ultimately means higher interest costs over the life of the loan.

Fortunately, none of these options are necessary under CARES. Borrowers of federal school loans have an interest rate of 0% until at least September 30th, when the deferred payment protection currently expires.

In both cases – under the CARES Act and in other situations – filing an abstinence application should not harm your credit rating. While your service staff may record your abstinence plan on their credit report, if you resume payments as agreed, it shouldn’t affect your score.


Wondering what your credit rating is? Head to Credible to test yours without negatively affecting it.

Debt Consolidation

You can also consolidate your student debt, which essentially consolidates all of your loans into one, optimizing repayment and, in many cases, lowering your interest rate and monthly payment.

If you have federal loans, you would use a direct consolidation loan. This allows you to retain all the benefits of federal student loans (such as forgiveness, income-based repayment plans, etc.), as well as consolidate your loans at no additional cost.

“If you make payments on a variety of federal loans, consolidation is the best way to reduce stress and multiple payments while keeping your loans organized,” said Leslie Thane, Founder and Debt Relief Attorney at Tayne Law Group.

For private student loans, you will need to do what is called refinancing. This is when you apply for a new private loan and then use it to pay off all existing loans. This is usually a smart move if you can get a new loan at a lower rate than the one you are currently paying.

Thinking of Refinancing Private Student Loans? Use online student loan refinancing calculator to understand what your new payment might be.


The deferral is similar to the deferral, except that your loan will not earn interest while your payments are suspended – at least not on subsidized federal loans.

“The difference between a deferred payment and a deferred payment has to do with the accrual of interest,” Thain said. “If you choose and are eligible to defer your student loans, you will not need to make payments, but interest will still be charged. If you delay paying off your student loans, you also won’t have to make payments and the loans will stop piling up. interest.”


However, there is one exception: if you have an unsubsidized federal loan, you will still owe interest during the grace period. As with abstinence, it can be paid monthly or included in the loan balance.

Change your repayment plan

Changing your repayment plan can also help. For private borrowers, this can mean extending the loan term and spreading payments over a longer period of time. This will lower monthly payments and make them more manageable, reducing the likelihood of missing payments or incurring late fees.

In some cases, you may need to refinance private student loans in order to change the maturity. Visit Credible to learn more about private student loans and receive individual rates from multiple lenders without affecting your credit rating.


Federal loan borrowers can benefit from an income-driven repayment plan. They allow you to make payments based on how much income you actually generate.

The federal government currently offers four different income-based repayment plans, some of which only require 10% of your monthly earnings. The plans are for 20 to 25 years, and once you make the minimum payments for that period, your loan balance will be written off.

The essence

If you are having trouble paying off your student loan, you have options. Contact your loan agent to see what you can qualify for, or consider consolidating or refinancing your loans to make payments more affordable.

Are you ready to take action? Visit Credible to view private student loan options now.

Have a financial question but don’t know who to contact? Write to the Safe Money Specialist at moneyexpert@credible.com and your question can be answered by Credible in our Money Expert column.


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