Trouble Repaying Student Loans

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Paying Off Student Loan Debt

Student Loan Consolidation

Stumbling Over Student Loans

Repaying Student Loans: The Problem

Does anyone know of ways to consolidate school loans? I have three separate loans and they have all come due. It totals a sizable amount of my income and I cannot afford to pay loans and rent and have food on the table in the current job that I have. Please help me so that I can make smaller payments. I appreciate all the education that I have received. I just need to know how to manage better.

Dept. of Education

Try the U.S. Department of Education. I consolidated my student loans through their William D. Ford Federal Direct Loan program. They offer a variety of repayment plans, including "income contingent" which fluctuates according to your yearly income. The number I have for them is 1-800-848-0979.

Repaying Student Loans: Call Loan Company

I had a similar problem a few months ago. I am a stay-at-home mom and was told to pay my loan now or let it go into default. I called the company that holds my husband's school loans (his were still in the initial forbearance period) and had mine added to his. This gave us a total loan of over $21,000 but the monthly payments actually decreased. We were aso able to apply for an economic hardship forbearance. They review our income once a year and base our monthly payments on our income.

The only other option I was given was to pay my school loans off with a high rate credit card. So, either I owe my $7,000 with 8% interest or 20% interest.

There are several different types of forbearances, deferments and income contringent repayment plans. Call your loan holder and ask what they have available! Note, interest does accrue during these periods of forbearance and deferment.

Try Sallie Mae

Call Sallie Mae right now! They will consolidate your federal loans into one easy payment. They offer income sensitive, forbearance, and other payments options. You will have 15 years to pay it back. They will combine and average your interest rates into a new one, which may be higher than one of your current loans, but still low @ 6%.

The service is called "Smart Loan" you can contact Sallie Mae to see if you qualify at 1-800/524-9100 or Eligible school loans are combined into one new loan with new terms and a single monthly payment. Payments are lower because a "Smart Loan" Account extends your repayment term, depending on how much you owe, up to 30 years. You can reduce your payments further by choosing "interest-only" payments for the few years. They also have a "Flex Repay account". I consolidated and went from $300 to about $150
Crystal P.

Repaying Student Loans: Stepped Payments

I too, was in a situation where my student loan payments were more than I could handle. Fortunately, the issuer(s) of my student loans had many repayment options, from consolidation, to a "step" payment plan that allows you to repay your loans according to a percentage of your current income. Consolidation is a wonderful option, but your repayment period could be as long as 15-20 years, depending on the amount you owe. Also, temporary financial hardship forbearances are available if you cannot afford to pay anything. The downside to that option is that interest continues to accrue while the loan is in forbearance. Your best bet is to call the issuer ofyour loans and see what they can do to help you. Whatever you do, don't default!
Karla D.

Hardship Deferments

The best thing to do in this case (in which you can't afford living expenses if you pay your loans) is to contact the lender and apply for a hardship deferment. This will buy you more time to increase your income. Depending on your circumstances, you might also inquire about obtaining a forebearance.

What you don't want to do is to let them go into default. Once that happens, your children have an almost zero chance of obtaining a school loan should they need one. Communicate with your lenders.
Bonnie C.

Repaying Student Loans: Advice from a Loan Industry Insider

I work for a company that guarantees and services student loans, and there are quite a few options for helping reduce the burden student loan payments can place on your budget. I don't know if you've had any bad "run-ins" with collection people, but most employees that deal with borrowers are more than willing to work out a way to enable them to be paid off. Otherwise, if you can't pay them, then it's a loss for everybody. A borrower who communicates their willingness to pay, even if it means less, or at a later time, is viewed as a whole lot better than a borrower who doesn't communicate at all. So if you are having trouble, call first!

That said, here are some options.

  • Somehow keep paying your regular payments - hardest, but financially the best in the long run. The more you pay now, the sooner you will be free of this debt.

  • Deferment/Forbearance - Basically puts your payments on hold. These are useful for giving you a little time to get some other needs taken care of, so that you can better afford the student loan payments in the future. You may also have the option of paying interest-only payments to at least keep the interest from adding to your loan. Also, if your student loan debt is above a certain percentage of your income, you can file for a hardship forbearance at the very least.

  • Graduated Repayment - some newer loans are eligible for what they call an income-contingent repayment. This is where they look at your student loan compared to your income and expenses, and determine a new payment schedule with a payment amount that can fit in your budget better. This will more than likely lengthen the time you have to keep paying, but it's better than not being able to pay at all, and also keeps missed payments from showing up on your credit report.

  • Consolidation - If you have more than one loan, you can consolidate them into one loan, often with a lower payments, especially right now with the interest rates so low. Again, it may mean a longer time to pay though.

There should be an address, phone number, or even a form in your payment book, or on your bill somewhere where you can call for more information on what options you have. You can also check the website for more information on these options, including calculators to show you just how much you could save with some of these options.
Steve T.

Repaying Student Loans: From a Financial Aid Officer

One can obtain a booklet called "Financial Aid 1999-2000 Student Guide at most public libraries which has an entire section on consolidation of loans.

I have included some information from the FinAid Home Page.

Loan Consolidation, also called a Consolidation Loan, combines several student or parent loans into one bigger loan from a single lender, which is then used to pay off the balances on the other loans. Consolidation loans are available for most federal loans, including FFELP (Stafford, PLUS, and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans, and Direct loans. Some lenders offer consolidation loans for private loans as well.

Consolidation loans often reduce the size of the monthly payment by extending the term of the loan beyond the 10 year repayment plan that is standard with federal loans. Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. The reduced monthly payment may make the loan easier to repay for some borrowers. However, by extending the term of a loan the total amount of interest paid is increased.

Preferred Lenders
Key Bank
Bank One
PNC Bank
US Bank
Bank of America
Nellie Mae
Norwest / Wells Fargo
Access Group

In certain circumstances (for example, when one or more of the loans was being repaid in less than 10 years because of minimum payment requirements), a consolidation loan may decrease the monthly payment without extending the overall loan term beyond 10 years. In effect, the shorter term loan is being extended to 10 years. The total amount of interest paid will increase unless you continue to pay the same monthly payment as before, in which case the total amount of interest paid will decrease.

The interest rate on consolidation loans is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent, and capped at 8.25%.

Some graduate students have found it necessary to consolidate their educational loans when applying for a mortgage on a house.


Consolidation simplifies the repayment process but does involve a slight increase in the interest rate. Students who are having trouble making their payments should consider some of the alternate repayment terms provided for federal loans. Income contingent payments, for example, are adjusted to compensate for a lower monthly income. Graduated repayment provides lower payments during the first two years after graduation. Extended repayment allows you to extend the term of the loan without consolidation. Although each of these options increases the total amount of interest paid, the increase is less than that caused by consolidation.

To find a lender that's right for you, see the Preferred Lenders at the top of this page. These lenders offer competitive rates and the highest quality service.
Marv O.
Assistant Director - Financial Aid Office

Valuable Resources

Students and graduates can reduce their monthly payments by consolidating their student loans. Counselors will work with you to evaluate your current student debt load and seek ways to provide relief.

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