6 Ways to Get Out of Student Loan Debt

MONEYLIFEWAX.COM

Dealing with a substantial debt burden can be overwhelming. As you repay  your debt, wondering the best way to get out of student loan debt is  natural.

You wouldn’t be the first one to wonder if there’s a way to get out of  paying your student loans legally, like declaring bankruptcy.

The honest answer is getting out of your student loans by declaring  bankruptcy is pretty difficult. There are some other options that may  help minimize the amount of money you pay back, like federal forgiveness  programs or even options that can make monthly payments more  affordable, like income-driven repayment plans.

Loan Forgiveness Programs

Depending on your eligibility, there are a few different loan  forgiveness programs available to borrowers with federal student loans.  These programs could help you get out of paying a portion of student  loan debt as they forgive your loan balance after a certain number of  years.

No. 1

Income-Driven Repayment Plans

Income-driven repayment plans for  federal student loans tie a borrower’s monthly loan payments to their  income. Depending on the specific income-driven repayment plan you  select, they may cap your monthly payments between 10% to 20% of your  income, depending on eligibility.

No. 2

Disability Discharge

It may be possible to have federal student loans discharged if you have a  permanent disability. But it’s still very difficult to apply for a  total and permanent disability discharge .

No. 3

Temporary Relief: Deferment or Forbearance

This option won’t eliminate student loan debt but maybe an option to  consider for borrowers struggling to make monthly payments on their  federal student loans. Forbearance and deferment both offer borrowers the ability to pause their payments if they qualify.

No. 4

Student Loan Refinancing

Again, this option won’t get rid of your student loans, but it could help make student loans more affordable. By refinancing your student loans, you can potentially qualify for a lower interest rate, which can possibly lower your monthly payments, or save you money on interest over the life of your loan.

No. 5

Filing for Bankruptcy: A Last Resort

Bankruptcy is a legal option to clear debt, however, it is extremely  rare that student loans are eligible for discharge in bankruptcy. In  some instances, if a borrower can prove “undue hardship” they may be  able to have their student loans discharged in bankruptcy.

No. 6

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