How To Cope When You Can’t Pay Your Student Loans

We are coming up on the end of the school year and that means that another graduating class will be moving into adulthood with potentially tens of thousands of dollars’ worth of student loan debt.

While I could quote the statistics of how many people in America have student loans and even the amounts, I know that none of that matters if you are struggling with or concerned about how to make those payments with the income you currently have.

That’s why I want to give you some strategies to implement if you are struggling to make the minimum payments on those student loans.

Tip: Grab my FREE Debt Tracker Worksheet to keep your debt payoff on point as you move forward!

How to Cope When You Can’t Pay Your Student Loans

Note: If you are struggling to make the minimum payment on your student loans, know that the absolute worst thing you can do is to stop making payments. While it might seem nicer in the short-term, most student loans are insured by the government, meaning that you will find your paychecks being garnished, your tax refunds (if applicable) snatched from you, and might even find yourself in a heap of legal trouble. Not to mention, once you’ve defaulted on the loan it will be noted on your credit report and you will no longer have any of the options listed below.

Change Due Date

For a lot of individuals, the due date is the biggest issue. If you get paid more than once per month, it can be hard to divide up the expenses between paydays. If that’s you, the best thing to do is to call up your student loan provider and ask to have your payment date changed. Even a few days can make a huge difference.

Additional Resources:

Budgeting with Two Incomes

Reconsider Your Payment Plan

Right out of college, nearly all student loans default to a standard repayment plan. There are several other choices to choose from, though, if you do your research and verify what you might be eligible for.

Note: these options do not apply to private loans. If you have a private loan, the best option is to get on the phone with your lender to determine what course of action you can take moving forward.

Standard repayment

This plan requires monthly payments that stay the same over the course of 10 years. Your loan will be paid in full at the end of that time period.

Graduated repayment

Different than the standard repayment plan, the graduated plan has monthly payments that start out small and increase over the course of 10 years. Your loan will be paid off in the 10 years allotted.

It’s important to consider that your income situation may or may not change between now and the end of the 10 years, but the payment will go up incrementally. If you don’t expect an incremental increase in pay each year, my suggestion is to stay away from this plan.

Extended repayment plan

If you are looking for even smaller payments, but are okay with a longer term, this plan might be for you with monthly payments averaged over the course of 25 years. These payments stay the same from month to month and year to year but will be smaller than the standard repayment payments.

Extended graduated repayment plan

In the same manner as the graduated repayment plan, the extended graduated repayment plan allows for your monthly payments to go up incrementally over the years, but you’ll have 25 years to pay off your loan. This is a plan that many people choose right out of college, because they expect their incomes to rise over that time period.

With both extended repayment plans you WILL end up paying more interest over the life of the loan, though, so that’s something you might want to consider.

Income-driven repayment

From my own personal experience, I can say that if you are struggling with your student loan payments and aren’t already making a lot of money each year, an income-driven repayment plan might be just the ticket. Most of the plans include the option to have your loan forgiven if it’s not fully paid off within 20 to 25 years, although that depends on the terms of your individual loan.

There are several to choose from including Income-Based Repayment, Income-Contingent Repayment, Pay As You Earn, and Income-Sensitive Repayment. I’m not going to go into great detail on the individual plans as the form your lender will ask you to fill out will categorize you into the correct payment plan for your own situation.

Additional Resources:

Creating a Budget That Works

Debt Snowball Video Tutorial

Choose Forbearance or Deferment

If you’ve found yourself in a situation in which you cannot make the payments at all, then it might be a good time to consider a forbearance or deferment for a time.


If you cannot pay your loans, a forbearance is an option that might be available to you. Of course, it depends on your circumstances, but most lenders are open to considering it for medical or other financial complications that might arise.

The issue with forbearance is that the interest on your loans continues to accrue even while you aren’t making payments and if you cannot afford to pay that interest, gets added to the principal of your loan. This means that, over time, you’ll end up paying out a lot more.

When we first married, Justin had a bunch of medical expenses and we chose this option. We didn’t have enough money to make all of our payments AND the student loan payments as well. Unfortunately, we didn’t know about income-based repayment, so if you haven’t considered that as your first option, I highly recommend you do.


Similarly, deferment is an option that might be available to you. Unlike forbearance, though, when your payments are on hold, the interest does not accrue. In fact, you may have experienced a deferment when you first exited school. Most loans allow for a deferment of six months, ideally to let you get a job and have a little income, before they require payment.

Reasons for deferment can include: attending school at least half-time, unemployment, and economic hardship, among others. Make sure to contact your lender for their specific guidelines.

Additional Resources:

How To Pay Off Debt Quickly

How To Live on One Income (When You Are Used to Two)

Consolidate Those Loans

Another option to decrease your payments might include consolidating your loans. If you take the time to look at the breakdown of your student loans, you’ll find that there is often a long list of smaller loans that you took out over time. Some of those smaller loans might have higher interest rates, meaning that you will pay a lot more in the long-term.

By consolidating your loans, you may be able to decrease your interest rate and make one smaller payment on all of them.

Caution: no matter how much of a good idea it might seem at the time, DO NOT consolidate your loans together with those of your spouse. If something happens to your spouse, those student loans in his name will go away (i.e. you won’t be responsible for them). If, however, you’ve consolidated them into both of your names, even if he is no longer alive, you will still be responsible for them. Just something to consider.

Consider Forgiveness Programs

If you aren’t able to make your payment next month, this option isn’t going to be helpful to you at the moment, but it is worth considering in the long-term. Forgiveness programs are available to federal workers, teachers, and many others based on a long list of criteria found HERE.

You may or may not qualify, but I believe it’s always worth taking a look to make sure you aren’t missing the opportunity to offload those loans earlier than expected.

Additional Resources:

Things All College Grads Should Consider

High School Graduate: Navigating the Years To Come

Which Will You Choose

As in everything related to finance, the right payment option for you won’t necessarily be the same for another person. That’s why I recommend taking a good look at all the options and comparing each one to your own financial situation.

Whatever you do: don’t miss a payment. Contact your lender, tell them your story, and allow them to help you consider more situation-specific options that will get you through even a short stint of not being able to pay.

Justin and I are still working through paying off our loans. We’ve used forbearance, deferment, the graduated repayment plan, the extended graduated repayment plan, and are now on income-based repayment. Know that if you are not happy with your current plan, you can always make a switch.

Do you have student loans? If so, what have you found to be the best repayment plan for your situation?