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Home / Loans / 4+ Legitimate Ways To Manage Your Student Loans


Americans owe an eye-popping $1 trillion in student loans. Many are struggling to make the monthly payments, quite a few others are already in default. This has led a number of people to turn to debt relief companies in order to manage their student loans. Unfortunately, most of these companies will either charge exorbitant fees to fill out a few forms or are complete scams. There are; however, several legitimate ways to manage your student loan debt.

Free Government Options

If you are struggling with your monthly payments, your first step must be to contact your loan servicer. During that first call you should ask for either a deferment or a forbearance. The rules for each differ slightly, but they do the same thing: suspend all or part of your payments for a time.

  • A forbearance is most commonly granted for reasons of ”financial hardship”. This catch all phrase covers a great deal of territory. Anything from crushing medical debt to a temporary setback can fall under this umbrella. When you contact your loan servicer, the operator will be able to assess your situation and send you the appropriate paper work.
  • A deferment typically lasts longer than a forbearance, but is more difficult to get. Typically, being enrolled in school full-time, unemployment, or military service are the only situations covered by a deferment.

Loan Consolidation

If you have multiple government student loans, you can request a consolidation loan. The hope is that a single loan with a longer repayment term will lower your overall monthly commitment. You need to be aware of two things. First, there is no guarantee that the payment for one loan will be less than the multiple payments that you currently have. Second, the extended loan term will cause you to pay more in total interest over the life of the new loan.

Income-Based Repayment Plans

When you enter into an initial student loan, your repayment term will be ten years. You do have other options. There are loans with terms of 20 or 25 years. Consolidated loans can be for as long as 30 years. While these longer loan terms may prevent some borrowers from drowning in payments, others may need to rely on income-based repayment plans. These plans include the:

  • Income-Based Repayment Plan.
  • Pay as You Earn Repayment Plan.
  • Income-Contingent Repayment Plan.
  • Income-Sensitive Repayment Plan.

Each of these plans have payments that are tied to your income. Each has its own particular set of hardship criteria that needs to be met, but by making regular on-time payments for 20-25 years, any remaining debt will be forgiven. Keep in mind that your payments will be much lower than it was prior to being accepted into one of these programs, so the payments will not be nearly as burdensome.

Student Loan Forgiveness

Students who enter certain employment fields can have their student loans forgiven after making a set number of payments. These programs include:

  • Public Service Loan Forgiveness…you must have direct loans to be eligible for this program. If you qualify, all debt remaining after ten years of public service will be forgiven. You will need to make 120 full on-time payments while working for a government or qualifying nonprofit agency.
  • Stafford/Perkins Loan Forgiveness Program for Teachers…there is a set of complex rules for this program, but basically you need to teach full-time at a qualified low-income school for five consecutive years.

You can find out more about student loan forgiveness on the federal Department of Education’s website. Additionally, each state may have forgiveness programs of their own. You will have to check with the appropriate agency in your state.

There is a plethora of third party companies offering student debt relief, most of which have fairly high fees. Since each one of these programs is free to apply for, you can fill out the forms yourself is you have the time and patience. The amount of paperwork involved may seem overwhelming, but you can get through it. You can even call someone that you trust to help. You will find that leaning on a friend or family member for support will save you hundreds of dollars in this instance.


About the author: Jerry Coffey


Jerry Coffey spent many years in a debt-riddled gray area somewhere between broke and desperately broke. His seemingly endless need for more and more cash led him to payday loans, repossessions, bankruptcy, and depression. After years of the same financial style, he heard a piece of advice that inspired him to find a way to change. The advice: ''The very definition of a fool is someone who continues to do the same things, but expects different results.'' This led him to a much more frugal lifestyle that sees all of his bills paid on time and a growing savings account. Even the seed of a retirement account has begun to sprout.


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