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    How To Get Out Of Student Loan Debt Without Paying

    Student Loan Debt

    With over $1.6 trillion in student loan balances outstanding, America’s debt crisis is at an all-time high. Out of the total number of borrowers, 5.6 million owe more than $50,000. This kind of debt load can take a toll on your financial and mental health.

    If you’re struggling with repayments, there are various programs that you can benefit from. If you have a federal lending product you may be eligible for income-driven repayment plans and student loan forgiveness programs. However, in the case of private financing, you’ll have to settle with limited options.

    Read on to learn how to get out of student loan debt without paying. We have listed some of the legally approved methods that you can use to either get your arrears forgiven partially or in full. 

    If You Have A Federal Student Loan

    If you have federal student loans, then you’ll be eligible for a variety of repayment programs that can make your debt more manageable. Once you enroll in an income-driven repayment plan and make regular payments for a specified period, you can apply for a relevant forgiveness program.

    You’ll be assigned a repayment plan when you begin repaying your federal student lending product. Depending on your financial status, you can request a change to your payment schedule at any time without any extra cost. All you need to do is contact your financing provider to discuss the available options. 

    Income-Driven Repayment Plans

    Here are the income-driven repayment plans that you must first enroll in to be eligible for debt forgiveness programs:

    • REPAYE Plan - The Revised Pay As You Earn Repayment plan allows you to pay only 10% of your discretionary income as monthly debt payments. This plan qualifies for the PSLF program if you make 120 months of consecutive qualifying repayments
    • PAYE Plan - Under the Pay As You Earn Repayment Plan, you’ll pay 10% of your discretionary income, but the total will never be more than what you’d pay under a 10-year standard repayment plan
    • Income-Based Repayment Plan - To be eligible for this program, you must have a high debt amount compared to your income. Your monthly repayments will be around 10-15% of your discretionary income but never more than what you would generally pay under a 10-year standard repayment plan. This program also qualifies for PSLF if you make qualifying payments for 10 years
    • Income-Contingent Repayment Plan - Under this plan, your monthly payment will be either 20% of discretionary income or the amount you would pay on a standard repayment plan over 12 years adjusted based on your income, whichever is less.               This is another good option if you’re looking to apply for the PSLF program

    Student Loan Forgiveness 

    In addition to these income-driven repayment programs, federal student loans also offer other benefits like forgiveness, cancellation, and discharge. All of these mean the same but are used in different ways. If you’re no longer required to make monthly repayments due to your job, it’s categorized under cancellation or forgiveness. 

    On the other hand, if you’re no longer required to make monthly repayments due to other circumstances like permanent disability or the closure of your school before you graduate, it’s categorized under discharge. Let’s tell you more about these forgiveness programs.

    • Public Service Loan Forgiveness - This program is available for all direct federal loans. If you’re a government employee or an approved non-profit worker, you may be eligible. Under this solution, you can request forgiveness on the remaining balance once you’ve made 120 consecutive payments under a qualifying repayment plan
    • Teacher Loan Forgiveness - This program is available for Direct and FFEL Program financing. If you work as a full-time teacher in a low-income elementary or secondary school or an educational service agency for five consecutive academic years, you can apply for forgiveness of up to $17,500 on the eligible debt account
    • Loan Forgiveness Programs for Nurses - Registered nurses and medical practitioners have several forgiveness options like the PSLF and the Nurse Corps Loan Repayment Program. Under the Nurse Corps program, qualified nurses can get up to 85% of their college debt repaid
    • Military Student Loan Forgiveness Programs - Members of the Army, Navy, National Guard, Coast Guard, and Air Force may also qualify for their programs in addition to those already available with federal lending products

    Students may also be eligible for state-sponsored arrear repayment programs as well as other student loan repayment assistance programs (LRAP) offered for many public service jobs and volunteering professions.

    Cancellation

    You may qualify for cancellation of up to 100% of the Federal Perkins loan if you’ve worked as a full-time member in a public or non-profit elementary and secondary school. You must have served as either a teacher in a school for low-income families, special education, or any subject approved by the state education agency. To receive a cancellation, you must be a direct employee of the approved school.

    Discharge

    The Closed School Discharge program is available for Direct, FFEL, and Perkins loans. If your school closes while you’re enrolled or soon after you withdraw, you may be able to get a discharge. Another option called the Total and Permanent Disability (TPD) Discharge can be availed if you’re permanently disabled. You’ll need to submit VA and SSA documents alongside a physician’s certificate to apply for TPD. 

    There’s also the option of Discharge Due to Death. Under this program, a federal lending product can be discharged if the borrower or the student on whose behalf the PLUS loan was taken has passed away.

    Other than these options, a program called the False Certification Discharge allows you to apply for a discharge if your school falsely certified your eligibility for the financing. There’s also the Unpaid Refund Discharge program, which will enable you to request discharge because you withdrew from school, and the school’s financial aid office didn’t return the remaining funds to the lender. 

    Student Loan Consolidation

    You can consolidate multiple federal lending products into a single loan. Student loan debt consolidation will result in a unified monthly repayment and give you access to additional benefits like income-driven repayment and forgiveness programs.

    If You Have A Private Student Loan

    Choosing the right student loan is critical for your finances, especially when you consider the benefits. Compared to federal lending products, private financing alternatives don’t offer many repayment and forgiveness programs. If you find it difficult to repay your debt, the best option is to talk directly to your lender about the available options. Not all, but most lenders have programs in place to help you manage your monthly repayments.

    Depending on your lending product amount, payment status, and relationship with the lender, your lending company may be willing to offer you a unique and flexible repayment option. However, keep in mind that private lenders aren’t legally obligated to honor your request. 

    Many private lending institutions also offer deferment and forbearance. These two great options can help you temporarily postpone your arrear repayments. Deferment is a good choice if you’re re-enrolling in a school or joining the military. Forbearance, on the other hand, works great for borrowers who are struggling to make payments because of a sudden job loss, health issues, or any unexpected financial hardship. 

    Simply put, deferment is usually planned, but forbearance is a safety net for unforeseen circumstances. Although both these options allow you to put a hold on monthly repayments temporarily, interest will still accrue on the outstanding amount. Unlike subsidized federal lending products where the government bears the expenses, you’ll be liable to keep making interest-only payments on the outstanding balance. 

    If any of these options don’t work in your favor, the final option is to look for good student debt refinancing offers. Depending on your credit history and score, you may be eligible for a lower rate of interest. It’s a good idea to gather quotes from multiple lenders before you select one. Check for the lowest rates to get the best deal when refinancing. Most private companies also offer add-ons like autopay discounts, extended forbearance and deferment periods, and more.  

    Additional Ways To Get Out Of Student Loan Debt

    There are other not-so-direct ways to get out of student debt. These tactics don’t guarantee success, but they’re worth a try. Here’s what you can do in addition to applying for IDR plans and forgiveness programs. 

    Bankruptcy

    Discharging a student loan by filing bankruptcy is challenging but doable. You may be able to get your federal lending product discharged through bankruptcy only after you file an ‘adversary proceeding,’ thereby requesting the court to take into consideration that repaying the debt would impose an undue hardship on you and your dependents. 

    You’ll need to be able to prove in court that you won’t be able to maintain a minimal standard of living if you’re asked to make the monthly payments. You’ll also have to demonstrate that this financial situation will persist over the major portion of the repayment period and that you’ve made full and honest efforts to repay the student debt. 

    Based on the judgment, you may be eligible for one of the following outcomes:

    • Your student loan will be discharged in full
    • Your loan will be partially discharged, and you’ll be required to pay the remaining portion
    • You’ll be asked to repay the loan in full, but with flexible terms, such as a lower rate of interest

    Getting Help From An Employer

    Another option that can help you pay off educational arrears is employer-funded repayment programs. To attract young and talented professionals, companies are coming up with lucrative employer-based student loan relief programs. 

    Although these programs don’t offer tax benefits and are reflected as income in your account statement, they can help you pay off a major portion of your arrears while working. Check with your company’s HR department to learn about the programs they offer.

    Winning Loan Payment In A Game

    Digitalization seems to have invaded every aspect of our life, including student debt repayment. These days you can log in to an app and play a quiz to win cash rewards that can be used to pay off your student loan. 

    Givling, a web-based platform, helps you pay arrears faster by arranging in-app games and rewarding cash prizes. The app itself adds users to a three-person team to play a true or false question game and gives the winning team cash awards to help pay off debts.

    All you need to do is choose either 'yes' or 'no' to a question. Your team wins a point for every correct answer. However, if your team answers two consecutive questions incorrectly, you won’t be asked anymore. Based on the cumulative score of the right answers, you’ll be able to redeem cash prizes.

    Bottom Line

    Getting out of student debt without paying anything is next to impossible. However, there are various ways that you can use to manage your monthly payments better. If you have a federal loan, you’ll be able to benefit from an array of income-driven repayment plans and forgiveness programs. Check your eligibility for cancellation and discharge programs as well and seek financial counsel if needed. 

    Similarly, if you have private financing balances outstanding, you may want to talk directly to your lender and see if options like deferment and forbearance are available. If there aren’t any, consider refinancing the loan at a lower interest rate. Other than these direct options, you can also try creating a debt management plan, budgeting your finances, applying for employer-based student loan relief programs, and trying your luck and knowledge in online debt-reduction games like Givling. 

    Although bankruptcy is an option, it’s extremely difficult to achieve. Hence, we recommend that you try out all the other available options before considering it.