If you borrowed money to pay for college, you could be stuck paying off student debt for many years to come. Luckily, there are some standard—and some more creative—ways to stop making payments on your student loans legally and legitimately.
Federal Programs to Get Out of Paying Student Loans
You can’t completely escape student debt once it’s been acquired. However, a number of federal programs offer forgiveness, reduced monthly payments, deferment, or discharge and can help you pay less or put off your monthly payments for a period of time.
Here are 10 ways to get out of paying student loans legally, using federally-sponsored programs.
Income-Driven Repayment (IDR) Plans
The benefits of an income-driven repayment plan, or IDR, are two-fold: you can lower your monthly payment now, and you can have your balance forgiven after 20-25 years.
IDR plans cap your monthly student loan payment at a percentage of your discretionary income. That means that your loan payment should always be reasonably within your monthly budget.
If you still have a balance to repay after 20-25 years of qualified monthly payments under your IDR plan, that balance will be forgiven.
Keep in mind that stretching your loan payments out over 20 or 25 years will raise your principal balance as your interest continues to build. When your remaining balance is forgiven at the end of the repayment term, the forgiven amount may be considered taxable as income, leaving you with one last large bill to pay.
To request an income-driven repayment plan, you must fill out the form on studentloans.gov.
Deferment or Forbearance
Student loan deferment or forbearance will not get you out of paying your student loans forever. But if you’re undergoing a temporary financial hardship (if you lost your job, have an unexpected extra expense, etc.), deferment may be a good option.
A deferment allows you to stop or greatly reduce payments on your federal student loans temporarily, without going into default. Depending on the type of loan you hold, you may not be responsible for interest that accrues during deferment.
You typically are not responsible for paying any interest which accrues on these types of loans:
- Direct Subsidized Loans
- Subsidized Federal Stafford Loans
- Federal Perkins Loans
- The subsidized portion of FFEL Consolidation Loans or Direct Consolidation Loans
On the other hand, you are responsible for paying the interest that accrues during deferment for the following types of loans:
- Direct Unsubsidized Loans
- Unsubsidized Stafford Loans
- Direct PLUS Loans
- FFEL PLUS Loans
- The unsubsidized portion of FFEL Consolidation Loans or Direct Consolidation Loans
Some private lenders also offer forbearance options for student loans. However, these typically last a much shorter amount of time and require you to pay any interest that accrues on the loan during forbearance.
For both federal and private student loan deferment and forbearance, you’ll need to contact your loan servicer.
Public Service Loan Forgiveness (PSLF)
Going into a public service field is a great way to get out of paying a large chunk of your student loan debt.
To qualify for this type of student loan forgiveness, you must work in an eligible public service field for 10 years. For those 10 years, you must work at least 30 hours per week. You must also make at least 120 qualified monthly payments under an income-driven repayment plan.
PSLF isn’t a guaranteed perk of working in public service, and your application could be denied, so it’s a good idea not to rely on this option entirely.
Government Volunteer Opportunities
If you didn’t go into a public service career, but you still want to qualify for PSLF or get help with student loans in exchange for your service, there are several government-funded volunteer opportunities that may be right for you:
If you’re interested in volunteering and helping the world, joining the Peace Corps can be a great way to pause student loan payments and potentially qualify for PSLF.
While you’re in the Peace Corps, you may qualify for deferment on your federal student loans, allowing you to pause payments. You may also be eligible for PLSF and partial cancellation of any Perkins Loans.
AmeriCorps and Volunteers in Service of America (VISTA)
AmeriCorps is part of the Corporation for National and Community Service. Its focus is placing young adults into positions where they’ll learn valuable work skills.
While you’re in AmeriCorps, you’ll qualify for forbearance of your student loans. You may get some of the accrued interest covered, but you’ll likely be responsible for at least part of the interest while you’re in forbearance.
National Health Service Corps
The National Health Service Corps (NHSC) is a government volunteer program as part of the U.S. Department of Health & Human Services.
To volunteer, you must be a primary care physician with a medical (MD, DO, NP, CNM, PA), dental (DMD, DDS, RDH) or behavioral health (HSP, LCSW, PNS, MFT, LPC) degree.
Clinicians can earn up to $50,000 to repay their medical school loans in exchange for a commitment of two years’ work at an approved site. Payment is made at the start of service, so you can pay down your student loans more quickly. The payment is also free from federal income tax.
Teach for America
While it is considered a volunteer opportunity, Teach for America offers a full salary and benefits, as well as help paying down student debt.
Teachers who opt into this program work in underserved and economically disadvantaged regions of the United States.
Teacher Loan Forgiveness
If you’re a teacher, you could qualify for forgiveness of up to $17,500 of your Direct or Stafford Loan, and up to 100% of a Perkins Loan.
To be considered eligible, you must be employed full-time as a highly-qualified teacher for five full, consecutive school years. Additionally, your place of employment must qualify as a low-income school or educational service agency.
Student Loan Repayment Assistance Programs (LRAPs)
Many colleges, state governments, and other institutional bodies offer Student Loan Repayment Assistance Programs—or LRAPs—to graduates who go into public interest careers with modest salaries.
These programs help enable students to go into less financially-rewarding fields without being discouraged by a disproportionate amount of debt.
One way to get out of paying part of your student loans is to find out if your college, state, or other institution related to your field offers a Student Loan Repayment Assistance Program. Typically, LRAPs are rewarded based on an applicant’s income, compared with their debt obligation.
One example of an LRAP is the California State Loan Repayment Program (SLRP). As a California resident and licensed healthcare provider, you could receive up to $110,000 towards your student loans.
Closed School Discharge
If your school closed before you finished your degree program, you might qualify for Closed School Discharge.
To qualify, you must either be enrolled in a program when the school closes or have been enrolled within the last 120 days.
If your application for Closed School Discharge is accepted, you will have no further obligation to make payments on your loan, and you may have some of your previous loan payments reimbursed.
If your school closes while you’re still enrolled, it’s important to obtain your financial and academic records if you plan to go to another college or want to apply for Closed School Discharge.
False Certification Discharge
If you were the victim of identity theft, or if your loan was falsely certified by your school, you could qualify for False Certification Discharge. This could apply if you don’t meet the school’s requirements for admission, or if your name was forged on any documents.
Total and Permanent Disability (TPD)
If you are totally and permanently disabled and unable to make student loan payments, you may qualify for discharge of your federal student loans, as well as any TEACH Grant service obligation, under the TPD Discharge program. If approved, you’ll no longer be required to make payments or complete the service obligations.
Bankruptcy is last on this list because it can be an extremely taxing process. However, it is possible to have your student loans discharged if you can prove undue hardship. You will need to start the bankruptcy process by filing a Complaint to Determine Dischargeability. Then, you’ll have to prove that paying back your student loans would cause you and/or your dependents undue hardship. Proceedings will take place in bankruptcy court, and your creditors may take part in proceedings to challenge your request.
More Ways to Get Out of Paying Student Loans
If you don’t like any of the methods above, or you still need more help paying back your student debt after applying these methods, it may be time to get creative. Here are 5 more ways to get out of paying student loans.
You may love where you live, but would you move if it meant you could get out of paying student loans? Some states and regions—including Kansas and Niagara Falls—offer incentives for transplants.
Kansas’s Rural Opportunity Zones program, for example, authorizes 77 counties in the state to offer income tax waivers, as well as student loan repayments up to $15,000 over five years.
Similarly, the Opportunity Maine Tax Credit will help with student loans or issue a student loan tax credit if you move to their state, and the Hamilton Foundation offers help with student loans if you move to Hamilton, Ohio.
Talk to Your Cosigner
If you have a cosigner on your loan, and you’re struggling to make payments, it’s a good idea to let that cosigner know about the situation. After all, if you fail to make payments on your loan, they become responsible for the debt.
It would be in your cosigner’s best interest to take on partial or full responsibility for the loan, with your promise to pay them back, rather than wait until you can’t make any more payments.
Ask for Help from Friends and Family
One of the most tried-and-tested methods of paying back student loans is reaching out and asking for help. Doing so can be hard at first. However, if you’re in a tough financial spot, asking your family and friends for help isn’t the worst thing you can do.
You can set up a plan with friends or family members where you essentially take out a low- or no-interest loan from them to cover your student loan payments until you’re more financially solvent.
While this isn’t exactly a way to stop your student loan payments, it is a way to stop the stress of student loans until you’re better able to make those payments.
Ask for Help from the Internet
If you’ve already talked to your loved ones, or you’d just rather reach out to strangers, the Internet may be able to help.
Here are the most useful crowdfunding sites for raising money to pay your student loans:
Put an interesting and personal spin on your crowdfunding campaign to make sure people enjoy and share it with their friends. Come up with a positive name, rather than something simply asking for help.
Employer Student Loan Benefits
A recent ruling by the IRS opened the door for employers to offer a new type of benefit to its employees: student loan payment matching. This works within the employer’s 401(k) plan.
This could be especially beneficial to you if you’ve been putting off contributing to your 401(k) plan because of your student loan debt.
While this decision is fairly new, and few companies offer the benefit of student loan payment matching, it may become more prevalent in years to come. If you’re in the market for a new job, you may consider looking for an employer who offers this benefit.
How to Get Out of Student Loans: Bottom Line
To summarize, you can’t get out of your student loans entirely without any negative consequences. Once you’ve taken on a debt, the debt is yours until it is repaid. However, going through the process of applying for an income-driven repayment plan, as well as seeing if you qualify for forgiveness and other programs, can be well worth the effort. The steps and suggestions above (with the exception of bankruptcy) can help you steer clear of loan default and protect your credit score.
Estimated 15 minute phone call