Having trouble making student loan payments? Here’s what to do

If you can’t make your payments, you have options. (iStock)

Paying for college isn't all that easy. Student loan debt is at an all-time high in the U.S., topping out at over $1.5 trillion. For borrowers dealing with these college cost debts, the payments can be burdensome — particularly during a pandemic that’s rife with job losses and economic shutdowns.

Fortunately, the CARES Act offered some emergency relief, at least for federal loan borrowers. Passed in March 2020, the loan relief measure lets borrowers pause their student loan payments — interest-free — through September 30, 2021.


That’s not the only option that those with trouble paying back loans have, though. If you’re having a hard time making monthly student loan payments upon leaving school, one of the following strategies and repayment options can help.


Forbearance, which is technically what the CARES Act offers, allows borrowers to suspend payment due to hardship. Forbearance is available on both federal and private student loans, and typically, the borrower pays all or most of the interest that accrues during the paused period. 

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

Fortunately, under the CARES Act, neither option is necessary. Borrowers of federal school loans enjoy a 0% interest rate until at least September 30, when the protections to postpone payments are currently slated to expire.

In both cases — under the CARES Act and in other situations — applying for forbearance shouldn’t hurt your credit score. Though your servicer can make a note of your forbearance plan on your credit report, as long as you resume payments as agreed, it shouldn’t have any impact on your score.


Curious what your credit score is? Head to Credible to check yours without negatively impacting it.

Debt consolidation

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

If you have federal loans, you’d use a Direct Consolidation Loan. This lets you retain all the benefits of federal student loans (things like forgiveness, income-based repayment plans, etc.), while also consolidating your loans at no extra fee.

"If you’re making payments on various federal loans, consolidating is the optimal way to reduce stress and multiple payments while staying organized with your loans," said Leslie Tayne, founder and debt relief attorney at Tayne Law Group.

For private student loans, you’d need to do what’s called refinancing. This is when you apply for a new private loan, and then use that one to pay off all your existing loans. It’s typically a smart move if you can secure a new loan at a lower rate than what you’re currently paying.

Thinking of refinancing your private student loans? Use an online student loan refinancing calculator to get a sense of what your new payment might be.


Deferment is similar to forbearance, except your loan won’t gain interest while your payments are paused — at least on subsidized federal loans.

"The difference between forbearance and deferment has to do with your interest accrual," Tayne said. "If you choose and are eligible for forbearance for your student loans, you do not have to make payments, but interest continues to accrue. If you defer your student loans, you also do not have to make payments, and the loans will stop accruing interest."


There’s one exception, though: If you have an unsubsidized federal loan, you’ll still owe interest during the deferment period. Just like with forbearance, this can be paid monthly or rolled into your loan balance.

Change your repayment plan

Altering your repayment plan can also help. For private loan borrowers, this might mean extending your loan term and spreading your payments across a longer period of time. This would lower payments each month and make them more manageable, making you less likely to possibly miss payments or incur a late fee for any that are past due.

In some cases, you may need to refinance your private student loans to change your repayment term. Visit Credible to learn more about private student loans and get personalized rates from multiple lenders without affecting your credit score.


For federal loan borrowers, getting on an income-driven loan repayment plan could help. These let you make payments based on how much income you’re actually bringing in.

The federal government currently offers four different income-based repayment plans, some of which require just 10% of your monthly earnings. Plans last from 20 to 25 years, and once you’ve made your minimum payments for that period of time, your remaining loan balance is forgiven.

The bottom line

If you’re having trouble repaying your student loans, you have options. Contact your loan servicer to see what you might be eligible for, or consider consolidating or refinancing your loans to make payments more affordable.

Ready to take action? Visit Credible to view your private student loan options now.

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.