How to Get Help With Student Loans

1. Switch to an Income-Driven Repayment Plan

If your federal student loans are unaffordable, check out income-driven repayment plans. These plans have income requirements you must meet, so get in touch with your student loan servicer—the company that collects your payments—to find out which option is best for you.

Income-driven repayment bases monthly student loan payments on your discretionary income or adjusted gross income and family size rather than your loan balance. You'll typically pay 1% to 20% of your earnings, depending on the plan, and your balance will be forgiven after 20, 25 or 30 years.

Which plan you can use generally depends on when your loans were first disbursed.

Be aware: When you use an income-driven repayment plan, any forgiven balance will be taxed, and you'll likely pay more in interest. You must also recertify your income each year to stay eligible.

Learn more: How to Choose the Best Student Loan Repayment Plan

2. Apply for Student Loan Forgiveness

There are additional federal student loan forgiveness programs for borrowers in certain public service occupations. Closely follow each program's requirements to get forgiveness; your student loan servicer should be able to guide you.

• Public Service Loan Forgiveness: You may qualify for this program, known as PSLF, if you work full time (defined as an average of 30 hours per week) for a government agency or 501(c)3 nonprofit, you have federal direct loans or have consolidated loans into direct loans, and you're on an income-driven plan. Forgiveness on the balance happens after you've made 120 monthly payments, and it won't be taxed as income. The program has so many requirements that it can be hard to know if you're on track; use the government's PSLF Help Tool to check.
• Teacher Loan Forgiveness: While public school teachers generally qualify for PSLF, there's another program that gives certain teachers access to forgiveness sooner. Teacher Loan Forgiveness is available to teachers in low-income schools and forgives up to $17,500 in federal direct or FFEL loans over five years. Teachers can use both Teacher Loan Forgiveness and PSLF back to back if they're eligible.

Learn more: How to Get Student Loan Forgiveness

3. Consolidate Your Student Loans

Federal student loan consolidation will qualify certain loans for income-driven and forgiveness programs. It's also a way to lower payments on its own by extending your repayment term.

When you consolidate federal loans, the government turns multiple loans into one and gives you a new fixed interest rate that's a weighted average of your previous loans' rates, rounded up to the next one-eighth of 1%. Consolidation won't save you money on interest, but depending on your balance, you'll have more time to repay the consolidation loan—up to 30 years—and your monthly payment may decrease. When you're in need of a much lower monthly payment, though, income-driven repayment may be a better option, since it includes forgiveness.

Private student loan consolidation, or refinancing, can also lead to a lower monthly payment or interest savings over time. It's when a private lender pays off either private or federal student loans and provides you with a new one at a lower interest rate, which is based on your credit and income.

Refinancing isn't a good choice for many borrowers struggling with loans, since you'll need to show strong income and credit to qualify for the lowest interest rates. Plus, refinancing federal loans will disqualify you from programs like income-driven repayment and forgiveness. Consider refinancing just high-interest private student loans, if possible, or waiting until your finances are more solid.

Learn more: Is It Better to Consolidate or Refinance Student Loans?

Frequently Asked Questions

The Bottom Line

Paying your student loan bills on time should be a top priority, since missed payments can torpedo your credit scores. Switching to a new student loan payment plan can make payments more manageable so you can focus on other priorities.

While you're transitioning to a new payment plan, consider signing up for free credit monitoring from Experian. It's a convenient way to keep tabs on your credit report and get alerts of important changes.