Defaulting on student loans isn’t uncommon, but it does hurt your credit and finances — which is why it’s important to take action as soon as you know that you’re entering a cycle of late payments. If you’re looking for student loan help, explore these options so you don’t face any more setbacks.
National organizations that can help with student loans
There are lots of national organizations that offer student loan help — sometimes for free, sometimes for a fee. But you can take advantage of help from these places and more.
- American Consumer Credit Counseling (ACCC). ACCC offers student loan counseling regardless of where you are in repayment. You can speak with a counselor to learn strategies for repaying your loans and to receive advice for getting out of default.
- The Institute of Student Loan Advisors (TISLA). TISLA offers fast, free and fair student loan advice. There’s no registration or payment required to get help; TISLA runs on donations. You can get help finding out if you’re eligible for Public Service Loan Forgiveness, if your loan is delinquent or in default, if you should create a new repayment plan or if you should enroll in an income-driven repayment plan. TISLA can even offer advice for handling disputes with your student loan servicer.
- National Association of Consumer Advocates (NACA). If you’ve fallen far enough behind on student loan payments that you’re in or near default, you can reach out to an attorney through NACA. You can get matched up with help through attorneys, organizations or even government agencies that offer student loan help.
- National Consumer Law Center (NCLC). The Student Loan Borrower Assistance program through the NCLC can help you cancel student loans, manage repayment and challenge collection attempts. Through the NCLC, you may explore consolidation, rehabilitation or other repayment plans.
- National Foundation for Credit Counseling (NFCC). Sometimes you need a personal guide to walk you through your options, which you can get from the NFCC. Speak to a loan counselor to get a detailed review of your finances and then receive a customized plan to work your way back on track. NFCC is a nonprofit, and depending on your needs, you could get free help.
There are other organizations that may offer student loan help, including nonprofits that assist with other types of debt. Look for nonprofit organizations that offer free or reduced-cost help for student loan borrowers with limited incomes.
Local organizations that can help with student loans
Sometimes local nonprofits offer student loan help. You might be able to find these if you search for student loan help near you. Other times, you can use national nonprofits to find local assistance; many local groups use national databases so student loan borrowers can find help near them.
If you’re coming up short, search for student loan advisors or attorneys in your area. They might charge a hefty fee, but some could direct you to organizations that offer free or inexpensive help. Paying a one-time fee may also be worth it in the long run if it helps you avoid the financial consequences of defaulting on your loans.
Other ways to get help paying student loans
Sometimes you need substantial help with your student loans. These strategies might work for your circumstances:
- Contact your loan servicer. If at any point you’re on the verge of being late with a payment, reach out to your student loan servicer and explain your situation. In many cases, servicers will offer hardship programs to help you get back on track. The sooner you reach out, the more options you might have.
- Apply for deferment or forbearance. Both deferment and forbearance temporarily pause your student loan payments without negatively impacting your standing. Some private student loan lenders offer some form of forbearance, but it varies greatly between lenders. Right now, the federal government has suspended student loan payments due to the COVID-19 pandemic, so you’re not required to make payments through Sept. 30, 2021.
- Look into income-driven repayment plans. Federal income-driven repayment plans base your monthly payment on a percentage of your discretionary income and your household size. After 20 or 25 years — depending on your plan — the remaining loan balance is forgiven. These plans are available only for federal student loans.
- Refinance your loans. Refinancing is when you take out a new, private student loan that pays off all of your other loans, then make one payment on your new loan. Refinancing can help you get a lower monthly payment by netting you a lower interest rate or longer repayment term, although keep in mind that you’ll lose federal benefits if you refinance federal student loans.
- Explore debt relief or settlement. If you’re significantly behind on student loan payments and have exhausted all other options, you can explore debt settlement. This is when a for-profit debt relief company settles your debt for less than what you owe. It’s a dangerous option, since companies typically have you stop making any payments on your outstanding debt and you instead put money into an escrow-like account every month that goes toward the debt relief company. Your student loan servicer has no obligation to settle your debt for less than you owe, and working with a debt settlement company is not a guarantee that your student loan debt will be settled.
How to spot student loan relief scams
Student loan settlement isn’t always a safe option. There are plenty of companies that pretend to act in good faith, but instead of paying your student loan servicer, they take your money from that escrow-like account and keep it for themselves. Stay out of trouble by spotting student loan relief scams and avoid falling for one:
- Check to see if it’s legit. Your state’s attorney general will have consumer complaints on file about companies that offer debt settlement. Sometimes, the company information won’t show up at all, which is another red flag.
- Ask about hidden costs or fees. Real debt relief companies will disclose all of the costs and fees associated with the proposed program you’ll get enrolled into. If you don’t get this type of disclosure, you won’t have any idea where your money goes. If a company charges a fee before any relief or settlement has been implemented, it might not be a legit debt settlement company.
- Look out for empty promises. If a company tells you about “new government programs” or guarantees relief of any kind, it may not have your best interest at heart. Settlement is not guaranteed, and you shouldn’t expect it as the norm.