Student Loan Help: The 5 Steps You Need to Take

When you feel like your student loan debt keeps piling up and you can’t get ahead, remember that student loan help is never far away. You can get help with student loans that will eliminate your debt completely or lower your payments. Below you’ll find a list of free and paid resources and the five steps you need to take.

Step 1 – Find Out What Programs Are Available

Learn About Student Loan Forgiveness

Your student loans can be immediately forgiven if a school defrauded you, if you have a total and permanent disability, or if your school closed. Check out our complete guide to student loan forgiveness to find out a full list of available options.

There are many options for jobs that could qualify you for student loan forgiveness.  You can learn how to apply for the student loan forgiveness programs on your own. Your school can also give you some guidance about Perkins loan cancellation.

There are also forgiveness programs for federal student loans that will eliminate your remaining debt after 20 or 25 years of repayment if you sign up for income-driven repayment.

Apply for an Income-Driven Repayment Plan

If you know that you won’t be able to afford your loan payments for a long time, then you should sign up for an income-driven repayment plan. These plans will reduce your payments to a percentage of your income. If you’re earning $0, then you’ll pay $0 each month. After following this plan for 20 to 25 years, you’ll be forgiven of the remaining balance. You can apply for these online with studentloans.gov or with a paper application.

Private loans don’t have as many options in terms of repayment alternatives so we suggest that you stay in touch with your loan servicer to find out how you can reduce your payments to a more manageable amount. You can do so by signing up for auto-pay to get a reduction on your interest rate or by making interest-only payments for a while.

Step 2 – Contact Your Lender for Student Loan Help

You can give your loan servicer a call to ask questions about your loan — the servicer will have been assigned to you by either the federal government or your private lender depending on which type of loan you have. You can discuss what options are available to you, which may include student loan consolidation or a change in your repayment plan.  You might also qualify for a temporary deferment or forbearance.

Log onto the National Student Loan Data System to find out who your servicer is and what your balance is for your federal loans. Contact your lender who deals with your billing to find out who your servicer is for your private loans.

The following list of loan servicers are for loans made through the William D. Ford Federal Direct Loan (Direct Loan) Program and the Federal Family Education Loan (FFEL) Program:

Step 3 – Pay For Professional Student Loan Help

Get Student Loan Help from a Private Company For a Fee

Enlisting the help of a company that specializes in finding debt relief solutions is a good idea if you have a complex situation and are willing to invest in having someone help you figure it out. You can get a free assessment by companies who will connect you to the right people to assist with your particular situation.  This option should only be considered if you have tried to resolve your student loans on your own and with your lender first.

Enlist Free or Paid Credit Counseling for Student Loan Help

Credit counseling agencies can create a personalized plan of action for you as well. You can get general credit counseling such as how to budget for free, but student-loan-specific counseling can cost anywhere from $50 for the first session to $250 for a more intensive session that explains how to carry out the plan.

Hire a Lawyer to Help With Your Student Loans

Federal loans that have been unpaid for nine months go into default and the timeline for private loans is even shorter. A default will damage your credit report for seven years.

You can check with the U.S. government about how to get your student loans out of default and your loan servicer will tell you which one will work the best for your situation. Unfortunately, private student loan default is more complicated. You can be sued by a private lender to collect your debt. If you aren’t sure when you should hire an attorney for your student loans, it can’t hurt to call and ask some questions.

Once you have a lawyer, you can also ask if you should file a Chapter 7 or Chapter 13 bankruptcy to dissolve your student loan debt or change the repayment terms. Although this sounds like you’re wiping the slate clean, it’s a difficult path to take.

Step 4 – Learn How to Budget

Did you know that 40% of Americans couldn’t come up with $400 in cash in the event of an emergency? The country is in a budgeting crisis, because so many people either don’t know how to make a budget or know how to make one and don’t follow it. It’s possible that you don’t need student loan help as much as you need budgeting help.

Creating a budget isn’t difficult, but sticking to it is hard when you’ve formed bad habits over the years. We’ve outlined how to make a budget in five steps:

Record All of Your Income

Take a hard look at your pay stubs and any income from freelancing and write it down. You might be surprised by how you’ve under- or overestimated your earnings.

Write Down All of Your Expenses

How much is rent, gas, parking, electricity, and everything else you pay for in a month? Take a look at your past bills and your debits from your account to find out what you’re paying on a monthly basis. Don’t forget entertainment expenses such as Netflix and Spotify.

Set Financial Goals

Create goals for yourself. What do you want your money to do for you?

Track Your Spending

Track your spending for a month so you can see where your paychecks are going. Write down your purchases every day and be as accurate as possible so you avoid guessing later on.

Make Adjustments That Take Your Life into Account

Now minimize your expenses so you aren’t living beyond your means and you can put some money toward your goals. Make sure to leave some room in there for fun, too!

Step 5 – Work for a Company That Will Help Pay Your Student Loans

 A recent report says that only 4 percent of companies offer assistance with student loan debt, but Millennials state that they value these benefits more than any other generation. A few of the companies that offer this type of assistance include PWC, Aetna, Penguin Random House, Fidelity, Nvidia, and First Republic Bank.

PWC, for example, will pay up to $1,200 a year toward student loans for up to $10,000. Nvidia pays up to $6,000 a year for up to $30,000. This is a smart way to make a career move that is financially sound.  If you can’t find a company that helps pay your loans, you could look for a job which might automatically qualify you for some student loan forgiveness.

Frequently Asked Questions about Student Loan Help

One of the most important things you can do for help with your student loans is to understand what your options are. Don’t rely on rare stories of people who have wiped out their debt or have been taken to court over it — educate yourself about what options are feasible and find out what applies best to your specific financial situation.

Will Bankruptcy Eliminate My Student Loan Debt?

 Student loan debt can be one of the more difficult types of debt to wipe out with bankruptcy, but it’s not impossible. Here are a few of the guidelines:

• You need to prove that your loans are causing undue hardship to you and your dependents
• You may lose your case because you could qualify for income-driven repayment instead, which can get you payments as low as $0 a month
• Some private loans are exempt from the undue hardship requirement

 Bankruptcy can be a long and difficult path to take, but if you cannot pay your loans at all and can deal with the consequences of filing for bankruptcy, then it may be the option for you.

Do My Student Loans Go Away When I Die?

Many people wonder if student loans go away when you die — the answer depends on what type of loan it is. For federal student loans, the answer is yes. The loan is canceled upon death. For private student loans it depends on who the servicer is.

Sallie Mae’s Smart Option Student Loan, New York HESC’s NYHELPs loans, and Wells Fargo private student loans offer forgiveness policies for death and disability, but it’s important to note that this isn’t the norm. Sallie Mae’s Smart Option Student Loan, New York HESC’s NYHELPs loans, and Wells Fargo private student loans all offer death and disability forgiveness policies, but this isn’t the norm for most private lenders.

Can Student Loans Be Forgiven, Cancelled or Discharged?

Forgiveness, cancellation, and discharge of your student loans mean basically the same thing, but they’re used differently. If you don’t need to make payments on your student loans due to your job, then this is called forgiveness or cancellation. If you no longer need to make payments due to the closure of your school or permanent disability, for example, then this situation is called discharge.

 How Do You Get Your Student Loans Forgiven?

 Here’s a list of the types of forgiveness, cancellation, and discharge available for federal student loans.

If you think you were defrauded by your school or if your school violated certain state laws, then you may be eligible for borrower defense to repayment. If you think you qualify for any of the above situations, then you should contact your loan servicer. For Perkins Loans, contact the school who made the loan.

You are obligated to pay your loans even if you didn’t graduate, you can’t get hired anywhere, or you’re unhappy with the education you paid for. The promissory note that you signed when you got your loan means you also can’t say you don’t have responsibility paying for it if you were a minor i.e. under the age of 18 when you received it.

 How Do You Know If Your Taxes Will Be Taken Out For Student Loans?

If you’ve defaulted on your student loans that have been assigned to a collections agency, then the federal government can take your tax refund to help offset the costs of what you owe them. The IRS must provide you with a proposed offset as well as the opportunity for you to review your loan records. This notice would be sent to you via mail. If you never receive this letter, it is not grounds for challenging the tax offset, although you can challenge the offset for other reasons outlined on this page.

The IRS provides a toll-free number which you can call, go through the automated prompts, and see if you have any offsets pending on your social.  Their number is (800) 304-3107.

Closing Thoughts

Student loan help isn’t as far away as it seems. There are options available to you and many companies who want to assist you so you can get back on track. Find help for your student loans from any of the above resources so you can regain control of your life.