Student Loans: What to Do Right Now If You Can’t Afford Your Payments
February 17, 2026
When you’re struggling to pay other bills after graduation, it’s easy to forget that like all good things, that grace period on your student loans is coming to an end. If you can’t afford your scheduled payments, or even if you’ve fallen behind, there are several steps you can take to improve your situation.
The most important step is simply being proactive and picking up the phone. Letting your loans go into default is not an option. Most student loans are not dischargeable even if you declare bankruptcy. If you have federal loans in default, the government can garnish your wages, seize any eligible federal benefits, and take your tax refund. And then there are the penalties, fees, and interest you’ll add on top of what you already owe. Don’t go there. Try these options instead.
- Contact your lender. This is the first and most critical step. Explain your situation and ask about any other options available to you. Take notes or record the call, and keep all written correspondence you receive for your records.
- Change your repayment plan. If you have a federal student loan, you may be able to change from the standard 10-year plan to a more flexible plan that reduces your monthly payment and may offer forgiveness after 20 years. Currently, federal loans are eligible for income-driven repayment plans such as REPAYE, PAYE, IBR, and ICR. However, starting July 1, 2026, the federal student loan system will consolidate to a single “Repayment Assistance Plan” (RAP) for new loans, replacing all current income-driven plans after July 1, 2028. The RAP sets payments based on adjusted gross income and requires a minimum payment of $10/month regardless of income. Check the Department of Education repayment plans page for detailed and up-to-date information.
- Consider consolidating your loans. Consolidation can simplify payments if you have multiple federal loans. Applying is free and most loans are eligible. Consolidation can extend repayment up to 30 years and lower monthly payments but may increase total interest and limit eligibility for some forgiveness programs.
- Consider suspending your loan payments. Also known as forbearance or deferment, this option pauses payments but causes interest to accumulate and capitalize, increasing your total loan balance. Not ideal, but preferable to default. Useful during temporary hardship such as job loss or medical leave.
- See if you qualify for loan forgiveness. Programs like the Public Service Loan Forgiveness (PSLF) forgive remaining balances after 120 qualifying payments under an eligible repayment plan while working full-time for a qualifying employer (usually government or nonprofits). Enrolling in the PSLF program is crucial for payments to count. The Teacher Loan Forgiveness program offers forgiveness up to $17,500 for qualified teachers. Total and permanent disability discharge may also be available. Check the full list of forgiveness programs at Federal Student Aid forgiveness page. Note forgiven debt may be taxable income.
- Automate your payments. Once your repayment plan is set, automate monthly payments from your checking or savings account to avoid missed payments. Many lenders offer a small interest rate reduction for auto-pay enrollment.
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