Tips and tools to help you manage student loan debt

With college costs spiraling ever-upward, it’s no wonder that one in five adult Americans has student loan debt. That debt can make it difficult to qualify for a loan or other forms of financing to move forward on your life path. Thankfully, there are options for managing the debt and getting your financial life back on solid ground.

Understanding the impact of student loan debt
When making regular student loan payments, you have less money to set aside for other goals, like a home down payment, retirement or starting a family. Additionally, if you have high debt compared to your income, you may find it difficult to qualify for other financing, such as a car loan, a mortgage or credit cards.

Landlords and service providers (like cell phone and internet services) may also consider your loan payments when deciding whether you’ll be able to make your monthly payments to them. And if you find you can’t keep up with your student loan payments and default, that information will stay in your credit history for up to seven years.

Options for managing student loan debt
The first step to managing your debt is understanding the current terms of your loan. Check the interest rate, the payoff timeline, the minimum monthly payment and any potential fees, such as for late payments or early payoffs. Compare these same points when exploring solutions — like the five below — to make sure you’re moving into a better deal.

Income-driven repayment plans for federal student loans base your monthly payment on your income. Payments could be $0 if you don’t have a job, and your balance could be forgiven if you consistently make payments for 20 to 25 years.1

Loan forgiveness allows your federal student loan debt to be discharged, forgiven or canceled in certain circumstances — for instance, if you work in certain qualifying careers, if you can’t work due to a disability or if your school closed while you were enrolled or soon after you withdrew.3

Consolidation lets you combine multiple federal student loans into one loan, with one monthly payment. Consolidation might also reduce your interest rate or change your payback period.

Refinancing gives you an opportunity to change your interest rate and terms, such as extending your payback period to reduce your monthly payment or switching from a variable interest rate to a fixed interest rate.

However, refinancing your student loans into another loan type means you will lose federal repayment protections, like deferment and forbearance.

Loan deferment or forbearance allows you to temporarily stop or reduce your student loan payments. Depending on the plan and your loan, you may have to qualify for these options, and interest may still add up while you’re not making payments.

Student loan relief resources
Here are some resources where you can learn more about your options and find help for taking the next steps:

  1. Your student loan servicer. For federal government loans, log in to your My Federal Student Aid account or contact your federal student loan servicer. For private loans, ask your lender.

  2. Manage Loans section of the Federal Student Aid website

  3. The Consumer Financial Protection Bureau

  4. The Institute of Student Loan Advisors

  5. Nonprofit credit counseling agencies. Find a counselor who can help you develop and implement a personalized repayment plan, for a fee, at the National Foundation for Credit Counseling.

Be aware that there are fraudulent debt-relief companies out there with promises of immediate loan forgiveness and requests for personal information, such as your Social Security number or your Federal Student Aid ID. Remember, if an offer sounds too good to be true, it probably is.

Enjoy the payoff
Finding student loan relief can take time and effort. But the payoff could be immense — potentially freeing up funds for other needs and goals, keeping your credit history intact and putting you on a solid financial track for the future.

This article is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available.

1 “Income-Driven Repayment Plans,” Federal Student Aid, U.S. Department of Education,, accessed June 18, 2020 3 “Understanding Loan Forgiveness,” Federal Student Aid, U.S. Department of Education,, accessed June 18, 2020

“These Five Charts Show How Bad the Student Loan Debt Situation Is,” Nigel Chiwaya,, posted April 24, 2019,, accessed March 30, 2020

“6 Ways to Get Fast, Free Student Loan Help,” Brianna McGurran and Ryan Lane,, posted March 25, 2020,, accessed March 30, 2020

“Deferment vs. Forbearance: Which is right for your student loans?” Ryan Lane,, posted March 27, 2020,, accessed April 16, 2020