If you can’t afford to repay your loans you’re going to want to make sure that you are doing everything possible to stay on top of it. You need to understand what happens when you don’t pay your student loans. This is going to require you to make payments in one of several ways, the traditional way, or one described below. It’s also going to be important that you understand how to avoid going into default (that period of time when you simply stop paying your loans without making arrangements with the government).

How Loans Work

When you take out the loan it’s with the expectation that you will return it over a period of time. You can take just about as much as you want in loans but they are only going to be valid for the amount of time that you are actually enrolled in school. You need to remain enrolled at least half-time in order to defer the loan that you have. When you stop attending you’re going to need to start paying the loan. Remember you only get six months of a grace period before that money needs to start being paid back. So you need to make sure that you are ready and able to start paying it back when that time is up. If you can’t pay it back then this causes problems for you but there are ways to take care of that problem.



One of the best ways to put off paying back your loan is through deferment. If you don’t have any extra money to make payments at all you’re going to want to look into this method of putting off the payments. Keep in mind that while your loan is in deferment it may still continue to accrue interest. This means that you’ll continue to owe increasingly more money but it won’t come due for a period of time later.


Change Your Payment Plan

You can choose to use a repayment plan that is based on the amount of money that you make. Now this will only decrease your payment amount so far so if you aren’t working or you have a very low income job (or a very high loan amount) you may want to reconsider the deferment option that we talked about last. You’ll be able to get a little more flexibility and you’ll have more time to pay off the loan.


If you can’t afford to pay the ‘equal monthly payments’ but you don’t need something based entirely on income you can look into a graduated repayment plan instead. This will allow you to play a little less each month to begin with and gradually more and more. These graduated plans allow you to pay what you can afford now and count on the fact that you will get a better job soon. That way you will be able to pay more later on.



For a lot of people having difficulty with one loan leads to difficult with others. If this happens you should consider consolidation. This will allow you to group all of the loans you owe together. The groups that you owe money to will generally allow you to lesson the total amount owed in return for your promising to pay them off. You will be able to make a smaller payment every month in order to pay off all of the money that you owe to each different agency. In the end you will be able to pay off the loans without incurring penalties.


Make an Agreement

If you absolutely can’t afford to pay the loan then there is one other possible option. Talk with the loan provider. Explain to them that you can’t pay the amount due and offer a payoff amount. Find out from them how much money you would have to pay in order to wipe out the debt. Some loan companies will allow you to make that smaller payment in order to get rid of the loan completely. If you can’t afford the loan then definitely try to get the amount lowered. You may be surprised how much less some loan companies will take than what you actually owe.


Going Into Default

This is what you want to avoid with your student loans. You want to make sure that you are doing everything you can to avoid this and that means you’re going to need to go through the things on the top part of this article. If you do go into default your entire loan becomes due immediately and the government may be less interested in working with you. But what are you going to do if you do end up in default?


You will not be eligible for any additional financial aid. You may also have problems getting any other type of loans because your credit is going to be destroyed. On top of this, your wages may be garnished and any other income you receive could be taken as well to pay off that loan. None of these is going to be a good option and they’re going to make everything you want to do from here on out a lot more difficult.


For myself, going into default is something that I definitely never want to experience. I want to make sure that I can pay off my loans as they are due. I’m actually working on trying to pay off the loan early so that I don’t have to pay as much interest. If I was at risk of going into default however I would definitely look into graduated payments or even deferment before I would let that happen. Owning a house it’s important that I don’t get that negative hit on my credit that going into default would bring about. So I know that I’m going to work hard at paying off my loan as quickly as possible. I suggest you do too and if you can’t? Talk to your loan provider. And if you need a loan yourself then check it out here.