Use the steps below to help you make a plan for resolving your student loan problem.
What type of loan do you have?
Your options depend on the answer to this question. Go to the What Type of Loan Do I have? section to get more information about the different types of loan programs and to figure out what type you have. The sections on this site refer to federal loans unless specifically noted as private loan sections. All of the information on private loans is in the private loan section of the site.
If you are behind on payments, have you already gone into default?
Some programs are available only before you go into default.
Are you eligible for a loan discharge?
Regardless of whether you are in default, you should consider whether you can discharge your loan outside of bankruptcy. This is the most complete solution to student loan problems, but is available only in limited circumstances.
Is it likely that you will be able to discharge your loan in bankruptcy?
Discharging a student loan in bankruptcy is hard, but not impossible, to do. This may be a good idea if you are in very desperate financial circumstances and your situation is unlikely to improve.
If a discharge is not available, can you postpone repayment?
If you are not yet in default, you should check to see if you qualify for one of the deferment programs. Forbearance, available both before and after default, should also be considered. This may help you collect your thoughts and figure out your next steps without having to deal with collection hassles.
Could you pay your student loan if your monthly payment was more affordable?
If you can afford to pay something each month, just not as much as you are required to pay under your current plan, you should think about setting up a more affordable payment plan. For example, under the income-driven repayment plans for federal student loans, the government will cancel any remaining balance if you make payment for the required number of years. This is usually 20 years, but sometimes 25 depending on the program. There are also special programs to help you repay out of default on federal loans and get into an affordable repayment plan.
What can you do if collection has already begun?
You should consider whether you can challenge the collection action. Timing is critical. You also have rights to be free from collection harassment and abuse.
Your strategy will depend on the type of collection action. If the government is collecting outside of court, you have the right to request an administrative hearing and in some cases to reduce or even suspend collection.
If you are being sued for a federal or private loan, be sure to meet all court deadlines. You should also figure out whether the lender can collect against you if you lose the case.