What should I do if I can’t afford my student loan payment?

You may be able to lower your monthly payment by enrolling in a payment plan based on your income or a plan that extends the amount of time you will have to repay your loan.

Federal Student Loans

For federal student loans, there are several repayment plans available  to reduce your payments, including:

• Income-driven repayment  plans, like Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), or Income-Contingent Repayment (ICR)
• Graduated repayment
• Extended repayment

You may also be able to postpone your payments under deferment or forbearance.

If you are having trouble making your loan payments, contact your servicer to explore all of your options that might help to make your payments more affordable, including income-driven repayment  (IDR) plans. IDR plans may lower your monthly payment, possibly as low as $0, because your payment amount is tied to 10% – 15% of your income.

Private Student Loans

Unlike federal student loans, there are no standard options to lower your monthly payments on a private student loan. Every lender is different. Some lenders will offer modified repayment plans that are similar to the federal programs, particularly graduated repayment.

If you are worried about missing payments, the most important thing to do is to contact your servicer or visit the servicer’s website to see if you have any options. If you definitely will be missing a payment, call the loan servicer as soon as possible to discuss the situation.

If you don’t make your student loan payments, there could be serious consequences, including:

• Your lender or servicer will report the missed payments to credit reporting companies, hurting your credit rating.
• If your loan goes into default, your lender or servicer may attempt to collect on your debt directly or through a collection agency.
• Your lender or servicer may take legal action against you or against your co-signer or may take payments through wage garnishment and tax refund withholding.
• If you have a co-signer, the co-signer’s credit standing will be harmed and the co-signer may be called upon to make your payments, face debt collection, or be sued.

See more options and tips for trouble paying federal loans, private loans, or both.