Stop paying without telling anyone and you will fall behind fast

If you cannot afford your student loan payment this month, contact your loan servicer before the payment is due. Do not skip the payment and hope the problem goes away. Missing a payment triggers late fees, damage to your credit report, and collection calls—and it locks you out of the programs that could actually help you.

Your servicer is the company that sends you the bill each month. You can find their name and phone number on your loan statement or at StudentAid.gov. Call them and explain that you cannot make the payment. They have programs ready to use, and most of them cost nothing.

The key is timing: you have more options if you call before the payment is late than if you call after. Once a payment is 90 days overdue, your loan goes into default, and the federal government can take your tax refund or garnish your wages without a court order.

Key Takeaways

  • Contact your loan servicer before your payment is due—waiting until after you miss it closes off your best options.
  • Income-driven repayment plans can lower your monthly payment to as little as $0 if your income is low enough, and they take effect within weeks.
  • Deferment and forbearance pause your payments temporarily, but interest still accrues on unsubsidized loans, so use them only when income-driven plans do not work.
  • If you have federal loans and work in public service, Public Service Loan Forgiveness may erase your remaining balance after 120 may have access to payments.
  • Private student loans have fewer safety nets, so contact your lender immediately to ask about hardship programs or temporary payment reductions.

Income-driven repayment: the fastest way to lower your payment

If you have federal student loans, you can switch to an income-driven repayment plan that bases your monthly payment on what you actually earn, not the standard 10-year schedule. Four plans exist: PAYE (Pay As You Earn), REPAYE (Revised Pay As You Earn), IBR (Income-Based Repayment), and ICR (Income-Contingent Repayment). Most borrowers use PAYE or REPAYE because they offer the lowest payments.

Under PAYE, your payment is 10% of your discretionary income—the amount your income exceeds 150% of the federal poverty line for your family size. If you earn $30,000 a year and live alone, your discretionary income is roughly $15,000, so your payment would be around $125 per month instead of the standard $300 or more. If your income is very low or you have dependents, your payment can be $0.

You request the plan change through your servicer's website or by phone. Most servicers process the request within two to four weeks. You will need to provide recent income documentation—usually your most recent tax return or a pay stub. Once approved, your new payment takes effect immediately, and any missed payments during the application period are forgiven if you were in financial hardship.

Income-driven plans come with a tradeoff: if your payment does not cover the interest that accrues each month, the unpaid interest capitalizes (gets added to your principal) after 25 years. However, any remaining balance is forgiven at that point. For most borrowers in genuine hardship, this is a better outcome than defaulting.

Deferment and forbearance: pause payments when income plans do not work

Deferment and forbearance are temporary stops on your payments. They are not the same, and which one you get depends on your loan type and your reason for requesting it.

Deferment is available if you are in school at least half-time, unemployed, or experiencing economic hardship. During deferment on subsidized federal loans, the government pays the interest for you. On unsubsidized loans, interest accrues but you do not have to pay it—it just adds to what you owe. Deferment typically lasts up to three years.

Forbearance is available to almost anyone and lasts up to 12 months at a time. You can request it multiple times, but servicers are more likely to grant it if you have a documented reason—job loss, medical emergency, or a natural disaster. During forbearance, interest accrues on all loan types. You do not pay it now, but it capitalizes later.

Request either one through your servicer. They will ask you to fill out a form and may ask for documentation of hardship. Processing takes one to two weeks. Use deferment or forbearance only if an income-driven plan is not available to you or if you need a very short pause while you stabilize your income.

Public Service Loan Forgiveness if you work in government or nonprofit

If you work full-time for a federal, state, or local government agency, or for a nonprofit organization with 501(c)(3) status, you may be on track for Public Service Loan Forgiveness (PSLF). After you make 120 may have access to monthly payments under an income-driven plan, your remaining balance is forgiven—tax-free.

The payments do not have to be consecutive, and they do not have to be large. If you are on PAYE and your payment is $50 a month, all 120 payments count. You can work for different employers as long as each one qualifies. The forgiveness happens automatically once you hit 120 payments and submit a final form.

PSLF is only for federal loans, not private loans. Check your employment status and loan type at the Federal Student Aid website. If you think you may have access to, ask your servicer to count your past payments toward the 120. Many borrowers have had years of payments counted retroactively.

Private student loans: fewer options, but still worth calling

Private student loans do not have income-driven plans, deferment, or forbearance built into federal law. However, your lender may offer hardship programs on their own. Call the number on your statement and tell them you cannot make the payment. Ask specifically about temporary payment reduction, interest-only payments, or a pause on collections.

Some private lenders will work with you if you explain your situation. Others will not. There is no may provide, but you lose nothing by asking. If your lender refuses and you fall behind, they can sue you and obtain a judgment against your wages or bank account.

If you have both federal and private loans, prioritize the federal ones first—they have more protections. Once you stabilize your income, you can address the private loans.

What happens if you miss a payment and do not act

A payment is late after 30 days. At 90 days, your loan goes into default. Once in default, your entire remaining balance becomes due immediately, collection agencies can contact you, and the federal government can take your tax refund or garnish up to 15% of your disposable income without a court order.

You can get out of default by making three consecutive on-time payments under an income-driven plan, or by paying the full amount owed. The three-payment route is called rehabilitation. Once you complete it, the default notation is removed from your credit report, and you regain access to income-driven plans and other federal protections.

If you are already in default, contact your servicer or the Federal Student Aid office at 1-800-621-3115 to start rehabilitation. Do not ignore collection calls or letters—they are your chance to negotiate a way forward.

Consolidation: combining loans to lower your payment

If you have multiple federal student loans, you can consolidate them into a single Direct Consolidation Loan. Consolidation does not lower your interest rate, but it extends your repayment term from 10 years to up to 25 years, which lowers your monthly payment.

Consolidation also gives you access to income-driven plans if your current loans do not may have access to. For example, Parent PLUS loans cannot use income-driven plans on their own, but if you consolidate them into a Direct Consolidation Loan, you can then switch to an income-driven plan.

The tradeoff is that you pay more interest over time because you are spreading payments across a longer period. Consolidate only if you need the lower payment now and can afford the extra interest later. You can consolidate at StudentAid.gov.

Frequently Asked Questions

Will switching to an income-driven plan hurt my credit?

No. Switching to an income-driven plan is not a late payment or a default. Your credit report will not be damaged. In fact, making on-time payments under an income-driven plan helps your credit score over time.

What if my income goes up after I switch to an income-driven plan?

Your payment will increase when you recertify your income each year. You can recertify online through your servicer. If your income rises significantly, you may want to switch back to the standard 10-year plan to pay off the loan faster and pay less interest overall.

Can I get my student loans forgiven if I am disabled?

Yes. If you are totally and permanently disabled, you can request a Total and Permanent Disability (TPD) discharge. This erases your federal student loans entirely. You will need documentation from the VA, Social Security, or a physician. Contact your servicer to start the process.

What if I have already defaulted on my loans?

You can still get out of default through rehabilitation—making three consecutive on-time payments under an income-driven plan. Once you complete rehabilitation, the default is removed from your credit report and you regain access to federal protections and forgiveness programs.

Do I have to pay back student loans if I did not finish my degree?

Yes. You owe the money regardless of whether you completed your program. However, you have the same options available: income-driven plans, deferment, forbearance, and forgiveness programs. Contact your servicer to discuss which option fits your situation.