If you’re struggling to afford your student loan payments, you're not alone. Since the pandemic, the average student loan payment has risen from $390 to $513 per month, adding to the financial stress many borrowers already face due to inflation. While the inability to pay is a widespread issue, it’s crucial to avoid falling into delinquency or default. Fortunately, several options can help you manage or even lower your payments.
Review Your Repayment Plan Options
Federal student loans offer various repayment plans designed to adjust your monthly payment based on your income and family size. If your current payments are too high, consider switching to an Income-Driven Repayment (IDR) plan, which could significantly reduce your payment by basing it on your income.
Additionally, graduated repayment plans might offer a lower payment initially, increasing gradually over time—an option worth exploring if you expect your income to grow in the future.
Consider Consolidation
Loan consolidation can help simplify your payments by combining multiple loans into one, potentially lowering your monthly payment by extending the loan term. However, it's important to note that while your monthly payment may decrease, you could end up paying more in interest over time. Make sure consolidation aligns with your long-term financial goals before proceeding.
Explore Deferment or Forbearance Eligibility
If you’re experiencing short-term financial hardship, deferment or forbearance may allow you to temporarily pause your payments. Deferment may be available if you’re unemployed or facing certain other situations, while forbearance can provide relief during other financial challenges.
Keep in mind that interest won’t accrue on subsidized loans during deferment, but it will during forbearance. If you’ve already missed payments, forbearance (which is typically easier to obtain) can be applied retroactively to cover your past due amounts. Additionally, if you’ve exhausted your forbearance time, consolidating your loans may reset your eligibility for future forbearance periods.
Seek Professional Help
If your financial circumstances have significantly changed, it’s essential to keep your loan servicer informed. Missed payments can lead to delinquency or default, damaging your credit and limiting future financial options.
Managing student loans can feel overwhelming, but you don’t have to do it alone. At Student Debt Solutions, our team of experts is here to provide you with personalized guidance, whether you’re exploring repayment plan options, considering consolidation, or looking into loan forgiveness strategies. Take the next step toward financial peace of mind by exploring your options with Student Debt Solutions today.