Can’t Pay Student Loans? Here Are Your Options

If you're struggling to repay student loans, you aren't alone. The 2025 Household Debt and Credit report by the Federal Reserve Bank of New York found that nearly 10% of student loans have not been paid in 90 or more days.

Missing payments can have immediate and long-term consequences, including damage to your credit score and restrictions on your ability to access new student loans. 

Whether you have federal or private student loans, there are ways to remain in good standing. Here are the steps you should take immediately if you need student loan repayment help.

Current student loan refinance rates

1. Reach out to your loan servicer

Your loan servicer is the first line of defense in preventing student loan default. 

Loan servicers are responsible for managing your payment activity. They have the clearest understanding of your loan terms, repayment options, and relief programs that can offer the most meaningful support.

The key is to contact your loan servicer before missing a payment, if possible. Explain why your personal circumstances are making loan repayment difficult and ask them to walk through hardship options you may be eligible for.

Keep records of all conversations you’ve had with your servicer, including dates, names of support agents you spoke with, and summaries of the conversation. This serves as proof that you’re doing your due diligence to work with your lender on a manageable solution.

See Also: How To Find Your Student Loan Servicer

2. Enroll in an income-driven repayment (IDR) plan

Federal student loan borrowers have access to income-driven repayment (IDR) plans that offer repayment relief for the life of the loan. 

IDR plans adjust your monthly loan payments based on your family size and discretionary income. You must recertify your income and family size annually so your servicer can calculate your correct payment amount. 

For loans disbursed before July 1, 2026, there are currently three IDR plans, although some are being phased out by July 1, 2028. Current plans include: 

• Income-Based Repayment (IBR) Plan
• Income-Contingent Repayment (ICR) Plan
• Pay As You Earn (PAYE) Plan

For new borrowers after July 1, 2026, there will only be one income-driven repayment option called the Repayment Assistance Plan (RAP), with payments as low as $10 per month.

These payment plans run for 20 to 30 years, depending on the IDR path you’ve chosen. If you still owe a balance after making all the required payments, your remaining debt is forgiven. 

3. Request temporary repayment relief

If your situation is temporary — like a recent job layoff or unexpected medical bills — deferment or forbearance can bring relief. 

If you have federal student loans 

The Department of Education offers deferment when you’re: 

• Enrolled at least half-time in school
• Accepted into a graduate fellowship program
• Participating in a rehabilitation training program
• Unemployed
• Experiencing financial hardship
• Undergoing cancer treatment
• On active duty military service
• A parent PLUS loan borrower

During deferment, payments are paused, but unless you have Direct Subsidized Loans, interest continues to accrue. Unpaid interest capitalizes, which means it’s added to your loan balance at the end of the deferment period. 

If your situation doesn’t fall under these deferment options, you may qualify for federal student loan forbearance. Forbearance also lets you pause your monthly payments, but the key difference is that interest continues to accrue regardless of your loan type.    

You might be able to request forbearance if you can’t afford your payments due to:

• An income that is much too low to cover your loan payments
• Financial challenges
• Service under the National Guard, AmeriCorps, or Department of Defense
• Dental or medical residency
• Working as a teacher who qualifies for Teacher Loan Forgiveness (TLF)

Whether you are in deferment or forbearance, you won’t make progress on paying down your debt or qualifying for loan forgiveness. 

If you have private student loans

Private student loan borrowers don’t have guaranteed access to deferment and forbearance programs, but many lenders offer relief options. 

“Private loan borrowers have no underfloor. No forgiveness programs. No income-based caps,” says Joe Braier, president and CEO of Lake Country Advisors in Wisconsin. 

“Direct negotiation with the servicer on a temporary hardship rate is much more successful than most people anticipate.” 

Braier explains that it may be possible to negotiate a temporary rate reduction if you have supporting documents and present a six-month plan in writing on how you’ll catch up on payments. 

“Certain borrowers have reduced $200 a month by simply calling up and giving actual figures as opposed to a vague request,” he says.

Every lender has a different risk tolerance when it comes to potential default. The best way to know what support measures are available to you as a private student loan borrower is to reach out to your lender as early as possible. 

4. Rework your budget

Regardless of whether you have federal or private student debt, it’s worth reassessing your budget if money is tight. You can: 

• Run an audit on your spending: Make a list of all your expenses over the last 3 months, and look for patterns and one-off outliers. Some banks make this easier with built-in budgeting tools that visually map your top spending areas.
• Reduce discretionary expenses: Cut back on food delivery or takeout orders, and trim nonessentials like personal shopping. Look for recurring costs to cut as well. Dropping 2 of 3 streaming services can make a noticeable difference by the end of the year.
• Don’t forget irregular expenses: These are hard-to-capture costs that come around every so often, like car registration fees, doctor's visit copays, or summer camp enrollment. Set money aside each month in a savings account for these events.

If your paydays don't line up with bill due dates, consider adjusting payment due dates with your provider. 

While adjusting your budget can help, it sometimes isn't enough. Braier says that distinguishing between a short-term cash flow issue and something deeper comes down to one calculation: your student loan debt-to-income ratio. Here's how to calculate it:

[(Monthly loan payment) / (Monthly gross income)] x 100 = student loan debt-to-income ratio

“When that ratio is less than 10%, then you are likely to have a timing issue. Perhaps a doctor bill or a car repair wiped out your buffer,” says Braier, noting that this cash flow gap should typically correct itself in 60 to 90 days. 

“However, when your payment swallows 20 percent or more of gross income, month after month, then it is structural. No budgetary gimmick solves a $600 bill on $3,000 of monthly income.”

5. Explore student loan refinancing  

Refinancing student debt can lower your payments by extending your loan term or potentially lowering your interest rate. This strategy requires a credit check, so it’s most effective for borrowers who have a strong credit history and stable income.

Although refinancing is possible for both private and federal student loans, refinancing federal loans has significant downsides. You risk losing access to federal programs and protections, like IDR, loan forgiveness, and reliable payment relief options. 

Always ask your servicer about your hardship options before refinancing federal loans.

Federal vs. private student loan repayment: Key differences in 2026

The type of student loans you have will affect your options if you’re struggling with student loan payments. Here are some key repayment differences between federal and private loans to inform your decisions.

It's also important to stay up to date on policy changes, as failing to understand new developments is one of the biggest mistakes borrowers make, according to JW Harris, a certified financial planner (CFP) and financial therapist. 

“Federal programs evolve. Not reviewing your plan annually can cost thousands,” says Harris. 

“The most successful borrowers approach repayment as a long-term, adaptable plan — one that’s informed by both financial strategy and self-awareness. When the plan aligns with values and life goals, repayment becomes less about deprivation and more about building the life you want.”

Read More: 5 Strategies To Cope With Student Loan Uncertainty When the Rules Keep Changing

What happens if I don’t pay my student loans?

As soon as you miss your first student loan payment, your account becomes delinquent. If your loans remain unpaid for longer, they will go into default. For federal loans, this typically occurs after 270 days of nonpayment. With private student loans, it varies by lender.

The consequences of default are expansive. Default can result in:

• Damage to your credit score
• Collection efforts and associated fees
• Wage garnishment for federal loans
• Tax refund offsets 
• Loss of access to aid or repayment options

Since default isn’t something that happens overnight, the faster you take action, the more paths you have available for relief.

Learn More: What Happens if You Never Pay Your Student Loans?