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Repay student debt

Paying off student debt can be confusing. Walk through your options and optimize how to pay off your loans.

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Know your options

This tool provides information and advice for optimizing how you pay off your student loans based on some basic information about your situation. While we can’t give you advice for your exact situation, we hope it can point you in the right direction and help you learn about some of your options.

Get started by answering a few questions below.

Your situation

Are your student loans federal or private (non-federal), or a mixture of both?

Federal loans

Federal student loans are loans made or guaranteed by the Department of Education. They typically have names like Direct Loan, Stafford, PLUS or Perkins. They are the most common type of student loan.

Private loans

Private or non-federal student loans are any other type of student loans. They can be made by a bank, a credit union, a state student loan agency or a college or university. They may have names like “alternative” or “institutional” loans.

Both

Many student loan borrowers have both private and federal student loans. Because repayment options for each type of loan are different, start by selecting the loan type that you are most concerned about. You can always return to the beginning of the tool and select the other loan type here in step one.

TIP

In order to use this tool, it will be helpful to have a list of your loans and required monthly payment amounts. If you don’t have this information, don’t worry.

You can get a list of all federal loans made to you by visiting the National Student Loan Data System and selecting “Financial Aid Review.” Click each individual loan to see who the servicer is for that loan (this is also the company that sends you a bill each month).

To learn more about your private student loans, take a look at your credit report or contact your school’s financial aid office.

I have FEDERAL loans.
I have PRIVATE/NON-FEDERAL loans.

Have you missed one or more payments on your student loans?

Additional information

Missing payments on your federal or private student loans can hurt your credit rating and your financial future.

Missing a payment on a student loan can result in late fees, additional interest charges, and can increase the cost of repayment over the lifetime of your loan.

I have MISSED one or more payments(s).
I have NOT MISSED any payments.

Are you currently in default?

Additional information

If you have gone more than 9 months (270 days) without making a payment on your federal student loans, you may be in default.

Many private student loans go into default as soon as you are 120 days late. In some cases, a borrower may default by missing just one or two payments. You can also default on a private student loan if you declare bankruptcy or default on another loan. Review your private loan contracts carefully to better understand what rights you have if you are worried about going into default.

I am IN DEFAULT.
I am NOT IN DEFAULT.
I am NOT SURE if I am in default.

Are you able to make any payments on your defaulted federal loan?

I am ABLE to make any payments on my defaulted federal loan.
I am NOT ABLE to make any payments on my defaulted federal loan.

Do you need to go back to school in the fall?

Additional information

When you default on a federal student loan, you lose eligibility to receive additional federal student aid. For many students, this makes going back to school impossible.

I DO plan to go back to school.
I do NOT plan to go back to school.

Do you need to get credit (for example, get a credit card, take out a mortgage, or qualify for a car loan)?

I DO want to get another type of credit.
I do NOT want to get another type of credit.

Can you pay off your defaulted federal student loans?

I CAN afford to pay off my defaulted federal loans.
I CANNOT afford to pay off my defaulted federal loan.

Are you confident you can make the full payment?

When you consider your current income, loan payments, other debt and living expenses, are you confident that you can make your full monthly student loan payments?

I AM confident I can make my monthly payments.
I am NOT confident I can make my monthly payments.
I am NOT SURE I can make my monthly payments.

Are you an active duty servicemember?

I AM an active duty servicemember.
I am NOT an active duty servicemember.

Direct debit and extra payments

You're well on your way as long as you keep up with your loan payments.

Helpful advice

  • Consider contacting your loan servicer to set up direct debit. Your servicer will automatically withdraw money from your bank account so you're less likely to miss a payment. Many lenders offer an interest rate reduction for those who set up direct debit, which could save you hundreds or thousands of dollars over the life of the loan!
  • Even if you set up direct debit, check your account periodically to make sure everything is being processed correctly. Be sure you have enough funds in your account or you might face fees from your bank and your student loan servicer.
  • If your budget allows for it, and you have already set aside some funds for emergencies, then you could consider making a payment for more than what is required. You'll pay off your loan faster and pay less in interest. For most federal loans and private (non-federal) loans, you can make additional payments at any time without a penalty.
  • If you do pay more than the minimum payment, be sure to apply these payments to your loan with the highest interest rate first. Generally speaking, this will be the best way to make a big dent in your debt.

Remember, you might also have other options. The best way to learn about all of them is to contact your servicer.

FEDERAL STUDENT LOAN CONSOLIDATION

Consolidation may be a good option if you're looking to simplify your repayment process. A Federal Direct Consolidation Loan can replace multiple federal student loans with one new loan featuring a single monthly payment. However, it won't lower your interest rate or your monthly payments.

Helpful advice

  • For federal student loan borrowers with multiple, older student loans from different lenders, consolidation offers added benefits, including eligibility for Public Service Loan Forgiveness.
  • If you have a lot of student debt, you may be able to extend your payments over a longer period of time. For borrowers with extremely high debt, this can be as long as 30 years. Although this will lower your monthly payments, it will cost you thousands of extra dollars over the lifetime of your loan. For most borrowers, Income-Based Repayment (IBR) is a cheaper alternative.
  • If you took out a federal student loan before 2006 and have a variable interest rate, consolidating your loans will "lock in" your current interest rate—a great opportunity for borrowers to take advantage of today's low rates.
  • Be aware, your interest rate will be recalculated as the weighted average of your current federal loans and rounded up to the nearest .125%. This means that your interest rate will not decrease and actually may rise slightly.

WARNING FOR SERVICEMEMBERS: Taking out a new Federal Direct Consolidation Loan will impact your eligibility for an interest rate reduction under the Servicemembers Civil Relief Act.

To get started on consolidation, contact the Department of Education (1-800-557-7392) to find out if consolidation is right for you. To begin the application process, check out the consolidation website. You can also use the Department's calculator to determine your payments if you choose to extend your loan term and lower monthly payments.

Lower your interest rate

If you are currently serving on active-duty you are eligible to have the interest rate lowered to 6% on all student loans taken out prior to your military service. This benefit applies to both your federal and private (non-federal) student loans and is available for all active-duty servicemembers, regardless of where you serve. Most borrowers on active-duty will qualify for this benefit, so it makes sense to start here.

To obtain an interest rate reduction under the Servicemembers Civil Relief Act (SCRA), contact your servicer and ask about this option directly. You will be required to provide your servicer with proof of your active-duty status in the form of orders from your commanding officer.

Learn more about the Servicemembers Civil Relief Act and other benefits for servicemembers with student loans from the U.S. Department of Education.

You may also be eligible for other benefits available to servicemembers, such as military deferment and Income-Based Repayment.

Income-driven repayment plans and public service loan forgiveness (PSLF)

This is one of the best options to stay on the road to repayment for federal student loan borrowers. Income-driven repayment plans ties your payment to your income and family size. (The chart below gives you an idea of your approximate payment.)

For borrowers who will make a career out of military service, Income-driven repayment plans provide another major benefit— you may be eligible for loan forgiveness after 10 years of reduced monthly payments. If you think you will spend a decade or more in the military, it is important to enter into an income-driven repayment plan as soon as possible; each qualifying monthly payment gets you closer to Public Service Loan Forgiveness (PSLF).

If you leave the military but plan to pursue another qualifying public service profession, like teaching or serving in government, you may still be eligible for PSLF.

Get started by enrolling online at StudentLoans.gov. Once you sign in, select “Income-Driven Repayment Plan Request.” These plans are always available for free to federal student loan borrowers with eligible loans.

You can also contact your servicer (the company that sends you a bill each month) about enrolling. They will likely ask for proof of your income, such as a tax return or pay stub, to determine your payment.

If you have an older federal loan made by a private lender, you may need to consolidate your loans in order to enroll in the income-driven repayment plan with the lowest monthly payment. Learn more about how this works here.

For federal loans, consider IBR before options that postpone payment like forbearance or deferment. While completely postponing payment is an attractive option, if you enroll in IBR you can keep your payments low and, if you continue to make payments and continue your service for 10 years, your loan will be forgiven.

Use this chart to see what your approximate monthly payment would be given your income and family size under the income-driven repayment plans with the lowest monthly payment. Check out the Department of Education's repayment estimator for precise amounts and more information.

Annual income Family size
1 2 3 4 5 6 7
$10,000 $0 $0 $0 $0 $0 $0 $0
$15,000 $0 $0 $0 $0 $0 $0 $0
$20,000 $20 $0 $0 $0 $0 $0 $0
$25,000 $61 $9 $0 $0 $0 $0 $0
$30,000 $103 $51 $0 $0 $0 $0 $0
$35,000 $145 $93 $41 $0 $0 $0 $0
$40,000 $186 $134 $82 $30 $0 $0 $0
$45,000 $228 $176 $124 $72 $20 $0 $0
$50,000 $270 $218 $166 $114 $62 $10 $0
$55,000 $311 $259 $207 $155 $103 $51 $0
$60,000 $353 $301 $249 $197 $145 $93 $41
$65,000 $395 $343 $291 $239 $187 $135 $83
$70,000 $436 $384 $332 $280 $228 $176 $124

Military Deferment

You are eligible to have federal loans deferred for a certain period of time if you are an active-duty member of the military serving in a military operation or national emergency.

Learn more about deferment for students, servicemembers, and other special situations from the Department of Education.

Remember, military deferment doesn't make your loans go away—and can mean that you will owe a lot more once you reenter repayment.

To get a deferment, contact your servicer and ask about this option directly. Once you're in deferment, you can still make a payment if you get some extra cash.

Remember, you might also have other options. The best way to learn about all of them is to contact your servicer.

Payment plans based on your income

Most borrowers with federal student loans can choose to set their monthly payment based on how much money they make. Income-driven payment plans provide the security of knowing that you can afford your payments.

Pay As You Earn

If you are a recent grad, Pay As You Earn (PAYE) is a newer repayment plan that is likely available for your federal student loans. The plan caps your monthly federal student loan payment at 10 percent of your discretionary income. If you think you might be eligible, learn more about who qualifies for PAYE here.

REPAYE

If you don’t think you’re eligible for Pay As You Earn, you should look into REPAYE (Revised Pay As You Earn). You can get a lower payment if your federal student loan debt is high compared to your income and family size. You can learn more here about who is eligible and the differences between these plans.

Get started

Get started by enrolling online at StudentLoans.gov. Once you sign in, select “Income-Driven Repayment Plan Request.” These plans are always available for free to federal student loan borrowers with eligible loans.

You can also contact your servicer (the company that sends you a bill each month) about enrolling. They will likely ask for proof of your income, such as a tax return or pay stub, to determine your payment.

If you have an older federal loan made by a private lender, you may need to consolidate your loans in order to enroll in the income-driven repayment plan with the lowest monthly payment. Learn more about how this works here.

How much will I have to pay if I enroll in an income-driven payment plan?

Use this chart to see what an approximate monthly payment would be given your income and family size for PAYE/REPAYE, the income-driven repayment plans with the lowest monthly payments.

Income-based repayment guidelines
Annual income Family size
1234567
$10,000$0 $0 $0 $0 $0 $0 $0
$15,000$0 $0 $0 $0 $0 $0 $0
$20,000$20 $0 $0 $0 $0 $0 $0
$25,000$61 $9 $0 $0 $0 $0 $0
$30,000$103 $51 $28 $0 $0 $0 $0
$35,000$145 $93 $41 $0 $0 $0 $0
$40,000$186 $134 $82 $30 $0 $0 $0
$45,000$228 $176 $124 $72 $20 $0 $0
$50,000$270 $218 $166 $114 $62 $10 $0
$55,000$311 $259 $207 $155 $103 $51 $0
$60,000$353 $301 $249 $197 $145 $93 $41
$65,000$395 $343 $291 $239 $187 $135 $83
$70,000$436 $384 $332 $280 $228 $176 $124

TIP

If you enroll in one of these options:

TIP

You never have to pay someone an up-front or monthly fee to enroll in these plans. Student loan debt relief scams can cost you thousands of dollars and drive you further into debt.

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If you're not eligible for these plans, or if your payment is already lower than the chart says it would be, you may be able to find a different plan that reduces your payment.


Federal direct consolidation loans

If you are currently in default on a federal student loan and plan to go back to school, you may benefit from a direct consolidation loan. If you cannot afford to pay off your loan in full, this is the fastest way to get out of default and restore your eligibility for federal student aid.

Through consolidation, your defaulted loans are paid off by a new loan with new repayment terms. If you do not make any payments on your defaulted loan(s) prior to consolidating them, you will be required to sign-up immediately for one of the alternative payment plans available to all federal student loan borrowers.

Ask your debt collector for specific information about fees. The costs associated with bringing your loan out of default may vary substantially depending on your individual circumstances.

Before you consolidate, make sure you understand the terms of this new payment arrangement and the terms of your new loan. If you default again, your only option to get out of default is to agree to a repayment plan with your debt collector.

Loan rehabilitation may be a better option for some borrowers; however, rehabilitation can take up to 10 months to complete. Like consolidation, loan rehabilitation restores your federal student aid eligibility but will also remove the default notation from your credit history. And in some cases, it can be cheaper than consolidation.

Under most circumstances, you have the right to pursue these options. Request information on both of these options from your debt collector or you may apply for a new direct consolidation loan with the U.S. Department of Education.

Contact your servicer or debt collection agency immediately to learn more about your options and to make arrangements to bring your loan out of default. If a debt collector refuses to offer you an option for which you believe you qualify, ask to speak with the debt collector's Special Assistance Unit. If your issue has not been resolved through the servicer's Special Assistance Unit, you may wish to review your options through the Federal Student Aid Ombudsman Group at the U.S. Department of Education.

When speaking with your servicer or a debt collector, be sure that you have written documentation about what federal student debt you owe. If you are concerned that you never borrowed certain loans, check the National Student Loan Data System. If the loan does not appear there, contact the collector and inform the collector of the problem. Remember, that system shows only your federal student loans, not your private student loans.

Rehabilitation

If you are currently in default on a federal student loan and you are interested in pursuing an option that offers the lowest monthly payment or the greatest benefit to your credit, you may benefit from rehabilitation.

  • Rehabilitation means that your loan will be taken out of default status after you make a series of consecutive (generally, nine) on-time, monthly payments.
  • You have the right to set your payments based on how much money you make. Your payments can be as low as $5 per month if you are unemployed or have very little income. Your debt collector is required by law to offer you this income-driven rehabilitation payment plan.

If a debt collector refuses to offer you an option for which you believe you qualify, submit a complaint online or by calling (855) 411-2372.

Rehabilitation won't repair your credit completely—your previous missed payments may still show up on your credit report—but any default notation will be removed. Your servicer or debt collector may ask you to provide documentation to demonstrate that you need a lower payment than they are suggesting. When negotiating with your debt collector, the law requires your collector to determine your payment amount based on your income; however, once you agree to a payment plan, you are required to make your monthly payment in order to rehabilitate your defaulted loan.

Contact your servicer or debt collector immediately to learn more about your options and to make arrangements to bring your loan out of default.

Ask the debt collector for specific information about fees. The costs associated with bringing your loan out of default may vary substantially depending on your individual circumstances.

When speaking with your servicer or a debt collector, be sure that you have written documentation about what federal student debt you owe. If you are concerned that you never borrowed certain loans, check the National Student Loan Data System. If the loan does not appear there, contact the collector and inform the collector of the problem. Remember, that system shows only your federal student loans, not your private student loans.

Repay Your Loan

Contact your debt collector to learn more about your options and to determine your pay-off balance. For some borrowers, this can be the cheapest way to bring a federal student loan out of default.

Your defaulted debt will be gone afterward, but it will continue to appear on your credit report as a defaulted loan that was repaid. By repaying your defaulted federal loan, you will restore your eligibility for federal student aid, if you chose to go back to school.

Ask the debt collector for specific information about fees. The costs associated with bringing your loan out of default may vary substantially depending on your individual circumstances.

If a debt collector refuses to offer you an option for which you believe you qualify, ask to speak with the debt collector's Special Assistance Unit. If your issue has not been resolved through the servicer's Special Assistance Unit, you may wish to review your options through the Federal Student Aid Ombudsman Group at the U.S. Department of Education.

When speaking with your servicer or a debt collector, be sure that you have written documentation about what federal student debt you owe. If you are concerned that you never borrowed certain loans, check the National Student Loan Data System. If the loan does not appear there, contact the collector and inform the collector of the problem. Remember, that system shows only your federal student loans, not your private student loans.

Know Your Options

Generally speaking, you have three options when dealing with the collector on a federal student loan:

  1. Rehabilitation: Rehabilitation means that your loan will be taken out of default status after you make a series of consecutive (generally, nine) on-time "reasonable and affordable" payments. You can typically only rehabilitate a loan once. This is the only way to remove the default notation from your credit history. If you chose to go back to school, you will also restore your eligibility for federal student aid after you make the sixth of nine monthly payments.
  2. Consolidation: Through consolidation, your defaulted loans are paid off by a new loan with new repayment terms. If you cannot afford to repay your loan in full, this is the fastest way to get out of default and enroll in one of the U.S. Department of Education's alternative payment plans. If you cannot afford to pay off your loan in full, it is also the fastest way to get out of default and restore your eligibility for federal student aid. Borrowers should also be aware that consolidation will not undo the negative effect on your credit report caused by your default.
  3. Repayment: If you can afford to pay off your defaulted federal loan, this is the fastest way to settle your debt. Under certain circumstances, your debt collector may be authorized to waive some of your outstanding fees and other collection costs. For some borrowers, this can be the cheapest way to bring a federal student loan out of default. Your defaulted debt will be gone afterward, but it will continue to appear on your credit report as a defaulted loan that was repaid. You will also restore your eligibility for federal student aid, if you chose to go back to school.

Contact your servicer or debt collector immediately to learn more about your options and to make arrangements to bring your loan out of default.

Ask the debt collector for specific information about fees. The costs associated with bringing your loan out of default may vary substantially depending on your individual circumstances.

If a debt collector refuses to offer you an option for which you believe you qualify, ask to speak with the debt collector's Special Assistance Unit. If your issue has not been resolved through the servicer's Special Assistance Unit, you may wish to review your options through the Federal Student Aid Ombudsman Group at the U.S. Department of Education.

When speaking with your servicer or a debt collector, be sure that you have written documentation about what federal student debt you owe. If you are concerned that you never borrowed certain loans, check the National Student Loan Data System. If the loan does not appear there, contact the collector and inform the collector of the problem. Remember, that system shows only your federal student loans, not your private student loans.

Federal direct consolidation loans

If you are currently in default on a federal student loan and cannot afford to make any payments toward your loan, you may benefit from a direct consolidation loan. If you cannot afford to pay off your loan in full, this is the fastest way to get out of default.

Under most circumstances, you have the right to pursue this option. You can either request a consolidation application from your debt collector or you may apply for a new direct consolidation loan with the U.S. Department of Education.

Remember to ask your debt collector for specific information about fees. The costs associated with bringing your loan out of default may vary substantially depending on your individual circumstance.

Through consolidation, your defaulted loans are paid off by a new loan with new repayment terms. If you do not make any payments on your defaulted loan(s) prior to consolidating them, you will be required to immediately sign-up for one of the alternative payment plans available to all federal student loan borrowers. You will also restore your eligibility for federal student aid, if you choose to go back to school. Before you consolidate, make sure you understand the terms of this new payment arrangement and the terms of your new loan. If you default again, your only option to get out of default is to agree to a repayment plan with your debt collector.

Loan rehabilitation may be a better option for some borrowers; however, rehabilitation can take up to 10 months to complete. Like consolidation, loan rehabilitation restores your federal student aid eligibility but will also remove the default notation from your credit history. And in some cases, it can be cheaper than consolidation.

Contact your servicer or debt collection agency immediately to learn more about your options and to make arrangements to bring your loan out of default.

If a debt collector refuses to offer you an option for which you believe you qualify, ask to speak with the debt collector's Special Assistance Unit. If your issue has not been resolved through the servicer's Special Assistance Unit, you may wish to review your options through the Federal Student Aid Ombudsman Group at the U.S. Department of Education.

When speaking with your servicer or a debt collector, be sure that you have written documentation about what federal student debt you owe. If you are concerned that you never borrowed certain loans, check the National Student Loan Data System. If the loan does not appear there, contact the collector and inform the collector of the problem. Remember, that system shows only your federal student loans, not your private student loans.

Getting ahead on your private student loan

You’re well on your way as long as you keep up with your loan payments. Here's some helpful advice to keep you on track:

Consider enrolling in auto-debit (setting up automatic payments)

If you enroll in auto-debit, your servicer (the company that sends you a bill each month) will automatically withdraw money from your bank account so you’re less likely to miss a payment. Many servicers and lenders offer an interest rate reduction for those who set up auto-debit, which could save you hundreds or thousands of dollars over the life of the loan!


Pay down your most expensive debt more quickly.

If your budget allows for it and you have already set aside some funds for emergencies, then you could consider making a payment for more than what is required. You’ll pay off your loan faster and pay less interest.

  • When paying more than your regular monthly payment, provide instructions. If you direct any extra money to your highest interest rate loan first, you may save hundreds of dollars or more in extra interest payments and you may be able to get out of debt faster. If you don’t provide instructions, your servicer will apply extra payments as it sees fit. This could make repaying your debt more expensive than it needs to be.
  • Consider using these sample instructions. You can use the sample letter text below in a letter, email or message sent via the “Send a Message” or “Contact Us” feature when you log into your account on the servicer’s website.
  • Helpful servicers will generally accommodate your request. You’ll want to be sure your servicer responds to your request so you know if you need to send additional instructions

Sample text: Paying more than you owe

You can copy and paste this text.

I am writing to provide you instructions on how to apply payments when I send an amount greater than the minimum amount due. Please apply payments as follows:

After applying the minimum amount due for each loan, any additional amount should be applied to the loan that is accruing the highest interest rate.

If there are multiple loans with the same interest rate, please apply the additional amount to the loan with the lowest outstanding principal balance.

If any additional amount above the minimum amount due ends up paying off an individual loan, please then apply any remaining part of my payment to the loan with the next highest interest rate.

It is possible that I may find an option to refinance my loans to a lower rate with another lender. If this lender or any third party makes payments to my account on my behalf, you should use the instructions outlined above.

Retain these instructions. Please apply these instructions to all future overpayments. Please confirm that these payments will be processed as specified or please provide an explanation as to why you are unable to follow these instructions.

Thank you for your cooperation.


Find out about consolidating (or refinancing) your private loans at a lower interest rate.

Borrowers repaying their private student loans may have much better credit than they did when they first borrowed for college. Unlike federal student loans, you may be able to consolidate (or refinance) your private student loans at a lower interest rate.

Although consolidation and refinance opportunities for private student loans have declined since 2008, a growing number of commercial lenders offer private student loan consolidation or refinance for creditworthy borrowers.

Contact your servicer to ask about these options. You may also want to check with your bank or credit union to see if they offer similar products.


Release your co-signer.

By releasing your co-signer, you will be removing your co-signer from their obligation to repay your loan. Releasing your co-signer can protect you from surprise defaults, even if you’ve been making your payment on time. Many lenders advertise that a co-signer may be released from a private student loan after a certain number of consecutive, timely payments and a credit check to determine if you are eligible to repay the loan on your own.

  • Ask for more information. If your lender offers co-signer release, you will want to ask about this benefit and remove your co-signer as soon as you are eligible. Many student loan servicers do not tell you when you are eligible to have your co-signer released, so you need to ask them directly how to do this.
  • Consider using these sample instructions. You can use the sample letter text below in a letter, email, or message sent via the “Send a Message” or “Contact Us” feature when you log into your account on the servicer’s website.

Sample text: Release your co-signer

You can copy and paste this text.

I am writing to you because I am seeking the release of my co-signer on my loan. Please conduct a review of my account to determine if I am eligible for co-signer release.

If you determine that I am not eligible to have my co-signer released from my l oans, please provide an explanation, including the following:

What is your current co-signer release policy?

For what reason(s) am I ineligible for co-signer release?

If I am not eligible for co-signer release now, when will I become eligible?

What steps do I need to take to qualify for co-signer release?

Do you anticipate modifying these requirements in the future? Will any future modifications apply to me when I seek to release my co-signer?

If I am unable to exercise this option at this time, please update/annotate my account to reflect that I intend to seek co-signer release as soon as possible. Please contact me at the point-in-time at which I am eligible to have my co-signer released.

In addition, if you are unable to provide any of the information or documentation I have requested or otherwise cannot comply with this request, please provide an explanation.

Thank you for your cooperation.

TIP

Remember, if you’re having a problem with a student loan , you can submit a complaint online or call us at (855) 411-2372.

Lower your interest rate

If you are currently serving on active duty, you are eligible to have the interest rate lowered to 6% on all student loans taken out prior to your military service. This benefit applies to both your federal and private (non-federal) student loans and is available for all active-duty servicemembers, regardless of where you serve. Most borrowers on active duty will qualify for this benefit, so it makes sense to start here.

To obtain an interest rate reduction under the Servicemembers Civil Relief Act (SCRA), contact your servicer and ask about this option directly. You will be required to provide your servicer with proof of your active duty status in the form of orders from your commanding officer.

Learn more about the Servicemembers Civil Relief Act and other benefits for servicemembers with student loans from the U.S. Department of Education.

You may also be eligible for other benefits available to servicemembers, such as military deferment and Income-Based Repayment (IBR) for federal student loans.

Military deferment/forbearance

Some private student loan servicers offer deferment or forbearance for servicemembers on active duty. This may provide temporary relief, but it does not eliminate your obligation to repay your loans.

Unlike some federal student loans, for most private student loans, interest will still accrue during periods of deferment and forbearance. If you do work with your servicer to temporarily suspend your monthly payments, your total debt will continue to grow and your monthly payments may be much higher when you begin to repay.

To get a military deferment or forbearance, contact your servicer and ask about this option directly. Once you're in deferment, you can still make a payment if you get some extra cash. If you can afford it, making interest-only payments is a good idea. It will stop your student debt from growing.

Remember, you might also have other options. The best way to learn about all of them is to contact your servicer.

Reach out to your loan servicer

You may have options to lower your monthly payment. Many companies say that they have alternate payment programs for borrowers who might not be able to make a full payment. These plans may include:

  • graduated repayment—a plan where your payments start out lower and gradually increase over time.
  • extended repayment—a plan where you pay less each month but extend the life of your loan over a longer period of time.

Asking for help when you run into trouble can keep you from falling further behind. Contact your student loan servicer and ask what options are available to you. Your student loan servicer is the company that sends you a bill each month.


Helpful advice

  • Consider downloading our sample financial worksheet to help you determine the maximum amount of money you can put toward student loans.
  • Be wary of options that postpone your monthly payment. When you put off making payments by signing up for forbearance or deferment, interest will still continue to accrue. This means that once you begin to pay back your loan again, you’ll discover that your student loan balance has grown (you will owe more money than before). You should also watch out for fees when enrolling in forbearance programs.
  • Consider using these sample instructions. You can use the sample letter text below in a letter, email, or message sent via the “Send a Message” or “Contact Us” feature when you log into your account on the servicer’s website. These instructions may help you get valuable information on repayment options to reduce your monthly payment or to temporarily postpone making payments.

Sample text: Request to reduce montly loan payment

You can copy and paste this text.

I am writing to you because I need to reduce my monthly private student loan payment due to a financial hardship. I am requesting a payment that allows me to meet my other necessary living expenses.

Please conduct a review of my account to determine whether I am eligible for an alternative repayment plan.

[This paragraph is optional] I believe I can afford to pay $____ per month toward my loan(s). If you require details on my monthly income and expenses, I have attached a worksheet which you can use to make an evaluation.

If you require additional authorization in order to reduce the amount of my monthly payment, please consider this letter a written request that you contact my lender or other authorized party to conduct a review of my account and provide a response within 15 days of receipt of this letter.

If you do not grant this request for a reduced payment plan, I will be at risk of default. If I receive a reduced payment plan, I may be able to avoid default, which is in the best interest of all parties.

If you determine that you are unwilling to provide a reduced payment plan, please provide the following information:

What available reduced payment options do you offer other than forbearance?

For what reason(s) am I ineligible for these repayment programs?

If I am not eligible for these repayment programs, when will I become eligible?

What steps do I need to take to qualify for these repayment programs?

Do you anticipate modifying these repayment programs in the future?

Where on your website can I find additional information on these alternative repayment programs?

In addition, if you are unable to provide any of the information or documentation I have requested or otherwise cannot comply with this request, please provide an explanation.

I hope we will be able to agree upon an acceptable repayment plan.

Thank you for your cooperation.


Keep in mind

Some student loan companies have told us that they may ask for recent pay stubs or a bank statement to verify income and expenses. Consider including these documents with your request, which you can mail or send through your private student loan servicer’s website after you login.

Keep in mind that unfortunately not all private student loan companies offer assistance when consumers are struggling to repay their loans. Using this letter may help you get a clear answer and avoid long hold times and transfers from one call center representative to another.

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Remember, if you’re having a problem with a student loan, you can submit a complaint online or call us at (855) 411-2372.

Getting out of default when you face debt collection

Dealing with a defaulted loan and debt collectors can be stressful. If you are in default on a private (non-federal) loan, it is important that you know your rights and responsibilities. While it is your responsibility to pay what is owed, remember that you have rights when dealing with debt collectors, and it is against the law for a collector to abuse, harass, or make false statements to you.

Unless provided in the initial contact, within five (5) days, every debt collector must send a written “validation notice” indicating how much money you owe, the name of the creditor you owe, what dispute rights you have if you think you do not owe this debt, and how to obtain information about the original creditor. Keep this notice and use it as a reference when speaking with a debt collector.

You may receive a notice that your entire student loan must be paid off immediately and in full, however you may be able to negotiate or set up a payment plan. You may also have the opportunity to negotiate with the collector to settle your debt for less than you currently owe. Below are some key points to keep in mind and some sample instructions you can use when communicating with collectors and creditors.


Key differences between private and federal student loan debt

For borrowers in default, it is important to remember that there are major differences between federal and private student loans.

A debt collector seeking to recover a private student loan does not work for, represent, or collect on behalf of the U.S. Department of Education or any other branch of the federal government. A debt collector trying to collect payments on a private student loan generally may not:

  • Garnish your wages without a court order;
  • Intercept your federal or state tax refund;
  • Garnish your Social Security or Social Security disability payments; or
  • Prevent you from receiving federal student aid to go back to school in the future.

Communicating with collectors

The first step to moving forward and getting out of default is clearly communicating with debt collectors. We’ve created five action letters that you can consider using in order to get valuable information about claims being made against you or protect yourself from inappropriate or unwanted collection activities.

  • Ask for more information about the debt

    If you do not immediately recognize the debt a collector has identified or if you want to find out more about the debt before you pay it, you may use this sample letter text to request more information.

    Sample text

    You can copy and paste this text.

    I am responding to your contact about a debt you are trying to collect. You contacted me by [phone/mail], on [date] and identified the debt as [any information they gave you about the debt]. Please supply the information below so that I can be fully informed:

    Why you think I owe the debt and to whom I owe it, including:

    • The name and address of the creditor to whom the debt is currently owed, the account number used by that creditor, and the amount owed.
    • If this debt started with a different creditor, provide the name and address of the original creditor, the account number used by that creditor, and the amount owed to that creditor at the time it was transferred. When you identify the original creditor, please provide any other name by which I might know them, if that is different from the official name. In addition, tell me when the current creditor obtained the debt and who the current creditor obtained it from.
    • Provide verification and documentation that there is a valid basis for claiming that I am required to pay the debt to the current creditor. For example, can you provide a copy of the written agreement that created my original requirement to pay?
    • If you are asking that I pay a debt that somebody else is or was required to pay, identify that person. Provide verification and documentation about why this is a debt that I am required to pay.

    The amount and age of the debt, including:

    • A copy of the last billing statement sent to me by the original creditor.
    • State the amount of the debt when you obtained it, and when that was.
    • If there have been any additional interest, fees or charges added since the last billing statement from the original creditor, provide an itemization showing the dates and amount of each added amount. In addition, explain how the added interest, fees or other charges are expressly authorized by the agreement creating the debt or are permitted by law.
    • If there have been any payments or other reductions since the last billing statement from the original creditor, provide an itemization showing the dates and amount of each of them.
    • If there have been any other changes or adjustments since the last billing statement from the original creditor, please provide full verification and documentation of the amount you are trying to collect. Explain how that amount was calculated. In addition, explain how the other changes or adjustments are expressly authorized by the agreement creating the debt or permitted by law.
    • Tell me when the creditor claims this debt became due and when it became delinquent.
    • Identify the date of the last payment made on this account.
    • Have you made a determination that this debt is within the statute of limitations applicable to it? Tell me when you think the statute of limitations expires for this debt, and how you determined that.

    Details about your authority to collect this debt.

    • I would like more information about your firm before I discuss the debt with you. Does your firm have a debt collection license from my state? If not, say why not. If so, provide the date of the license, the name on the license, the license number, and the name, address and telephone number of the state agency issuing the license.
    • If you are contacting me from a place outside my state, does your firm have a debt collection license from that place? If so, provide the date of the license, the name on the license, the license number, and the name, address and telephone number of the state agency issuing the license.

    I have asked for this information because I have some questions. I need to hear from you to make an informed decision about your claim that I owe this money. I am open to communicating with you for this purpose. In order to make sure that I am not put at any disadvantage, in the meantime please treat this debt as being in dispute and under discussion between us.

    In addition to providing the information requested above, please let me know whether you are prepared to accept less than the balance you are claiming is owed. If so, please tell me in writing your offer with the amount you will accept to fully resolve the account.

    Thank you for your cooperation.


  • Dispute the debt and ask collector to prove responsibility or stop communication

    If you do not want to discuss the debt until you have additional information verifying the debt, you may use this template letter to inform a collector that you are disputing the debt and instructs the collector to stop contacting you until they provide evidence that you are responsible for that debt.

    Sample text

    You can copy and paste this text.

    I am responding to your contact about collecting a debt. You contacted me by [phone/mail], on [date] and identified the debt as [any information they gave you about the debt].

    I do not have any responsibility for the debt you’re trying to collect.

    If you have good reason to believe that I am responsible for this debt, mail me the documents that make you believe that. Stop all other communication with me and with this address, and record that I dispute having any obligation for this debt. If you stop your collection of this debt, and forward or return it to another company, please indicate to them that it is disputed. If you report it to a credit bureau (or have already done so), also report that the debt is disputed.

    Thank you for your cooperation.


  • Restrict how and when a debt collector can contact you

    The Fair Debt Collection Practices Act prohibits debt collectors from contacting a consumer about a debt at a time or place they should know is inconvenient. If you want to work with a collector to resolve your debt, you may use this sample text to clearly state to the debt collector how you would like to be contacted.

    Sample text

    You can copy and paste this text.

    I am responding to your contact about collecting a debt. You contacted me by [phone/mail], on [date] and identified the debt as [any information they gave you about the debt].

    You can contact me about this debt, but only in the way I say below. Don’t contact me about this debt in other way, or at any other place or time. It is inconvenient to me to be contacted except as I authorize below.

    You can only contact me at:

    [Mailing address if you want to get mail]

    [Phone number and convenient times if you want to be contacted by phone]

    [If correct, include the following] My employer prohibits me from receiving communications like this at work.

    Thank you for your cooperation.


  • Inform a collector that you have hired a lawyer

    If you have hired a lawyer, generally, the debt collector should be contacting the lawyer instead of you. You may use this letter template to give the debt collector the lawyer’s information and instruct the collector to contact only the lawyer.

    Sample text

    You can copy and paste this text.

    I am responding to your contact about collecting a debt. You contacted me by [phone/mail], on [date] and identified the debt as [any information they gave you about the debt].

    Please contact my lawyer about this debt, and do not contact me directly again. My lawyer’s contact information is:

    [Contact information for your lawyer].

    Thank you for your cooperation.


  • Stop all communication

    You also have the right to stop a debt collector from attempting to contact you. Stopping contact from a debt collector does not cancel the debt. Stopping contact does not stop the collector from pursuing other remedies, such as reporting the collection on your credit report or suing you. Consider using this letter template if you feel you are being harassed by a collector’s communications.

    Sample text

    You can copy and paste this text.

    I am responding to your contact about a debt you are attempting to collect. You contacted me by [phone/mail], on [date]. You identified the debt as [any information they gave you about the debt].

    Please stop all communication with me and with this address about this debt.

    Record that I dispute having any obligation for this debt. If you forward or return this debt to another company, please indicate to them that it is disputed. If you report it to a credit bureau (or have already done so), also report that the debt is disputed.

    Thank you for your cooperation.


Remember, if you think that a debt collector has lied to you, harassed you or otherwise broken the law, you may want to see a lawyer. If you have a problem with debt collection, you can also submit a complaint online or call us at (855) 411-2372.

To download these letters as individual documents, visit our blog post on this topic.

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Dealing with student loan debt should be a financial priority because student loan debt will not “just go away” if you ignore it.

IIf you fail to repay a private student loan in default, it can severely damage your credit record and your credit score, making it difficult or more expensive to take out a mortgage, buy a car or even get a credit card. You may be subject to collection efforts by a debt collector or a law firm. You might even be sued by a debt collector and face a court order to garnish part of your wages—this means that money will be taken directly from your paycheck in order to satisfy your debt. And, unlike most other types of consumer debt, student loans cannot be discharged through bankruptcy, absent extraordinary circumstances (called “undue hardship”).

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Unlike federal student loans, there is a statute of limitations on the collection of private student debt.

For borrowers contacted by a debt collector about very old debt (generally debt you have not made any payments toward for two years or longer, depending on your state), you may be able to challenge a lawsuit from a debt collector on these grounds. In some states, a partial payment on an old account may restart the time period during which you can be sued. Learn more about your rights here.

Lower your interest rate

If you are currently serving on active duty you are eligible to have the interest rate lowered to 6% on all student loans taken out prior to your military service. This benefit applies to both your federal and private (non-federal) student loans and is available for all active-duty servicemembers, regardless of where you serve. Most borrowers on active duty will qualify for this benefit, so it makes sense to start here.

To obtain an interest rate reduction under the Servicemembers Civil Relief Act (SCRA), contact your servicer and ask about this option directly. You will be required to provide your servicer with proof of your active duty status in the form of orders from your commanding officer.

Learn more about the Servicemembers Civil Relief Act and other benefits for servicemembers with student loans from the U.S. Department of Education.

You may also be eligible for other benefits available to servicemembers, such as military deferment and Income-Based Repayment (IBR) for federal student loans.

Contact your servicer

Call your private (non-federal) loan servicer and ask what options are available to you. Most of the big lenders say that they have alternate payment programs for borrowers who might not be able to make a full payment. You can often find out about these options on your servicer's website.

Helpful advice

If you can afford to make partial payments, you may want to ask about graduated repayment or extended repayment. Not all private (non-federal) loan servicers offer these programs, but some do.

  • Graduated repayment has low payments in the early years that increase over time. This option can be good for those who are comfortable with their payments changing over time.
  • Extended repayment increases the time you will take to pay off the loan, so each individual payment is smaller.

Remember, both of these programs increase the total amount you pay in interest over the life of the loan, often substantially.

If you can't afford to pay at all, some of the most popular programs for temporarily stopping your payments are deferment and forbearance. Unlike federal student loans, your private (non-federal) loans don't have a common set of consumer protections when it comes to deferment and forbearance.

  • Generally speaking, you may be able to get a deferment if you're heading back to school. This will freeze payments on your loans (though interest might still be adding up).
  • Forbearance will also pause your payments. Again, interest might still add up. Watch out for fees when enrolling in forbearance programs.

Military deferment/forbearance

Some private student loan servicers offer deferment or forbearance for servicemembers on active duty. This may provide temporary relief, but it does not eliminate your obligation to repay your loans.

Unlike some federal student loans, for most private student loans, interest will still accrue during periods of deferment and forbearance. If you do work with your servicer to temporarily suspend your monthly payments, your total debt will continue to grow and your monthly payments may be much higher when you begin to repay.

To get a military deferment or forbearance, contact your servicer and ask about this option directly. Once you're in deferment, you can still make a payment if you get some extra cash. If you can afford it, making interest-only payments is a good idea. It will stop your student debt from growing.

Remember, you might also have other options. The best way to learn about all of them is to contact your servicer.