If you’re struggling with student loan payments, several federal programs can lower what you owe each month, and some can eventually erase your remaining balance entirely. The path forward depends on whether you have federal or private loans, whether you’re behind on payments, and what kind of work you do. Here’s how to find the right relief for your situation.
Lower Your Monthly Payment With Income-Driven Repayment
Income-driven repayment (IDR) plans set your monthly bill based on what you earn rather than what you owe. If your income is low relative to your debt, your payment could drop to zero. The federal government currently offers three IDR options: Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), and Pay As You Earn (PAYE). Each calculates your payment as a percentage of your discretionary income, which is the gap between what you earn and a baseline cost-of-living threshold.
You can apply directly at StudentAid.gov. You’ll need a verified FSA ID and your financial information. The application gives you the option to import your tax data electronically, which speeds up the process. If your income has changed significantly since your last tax return, you can upload current documentation instead. If you have no income at all, you can self-certify that on the application.
A few things to keep in mind: if you’re married, your spouse’s income and loan information may factor into your payment calculation depending on the plan. And if you hold Parent PLUS loans, you’ll need to consolidate them into a Direct Consolidation Loan before you’re eligible for any IDR plan. Once enrolled, you must recertify your income each year to stay on the plan.
Earn Forgiveness Through Public Service
Public Service Loan Forgiveness (PSLF) wipes out your remaining federal loan balance after you make 120 qualifying monthly payments while working full time for a qualifying employer. That’s roughly 10 years of payments, and they don’t need to be consecutive.
Qualifying employers include any U.S. federal, state, local, or tribal government agency, the military, tax-exempt nonprofits under Section 501(c)(3), and certain other nonprofits that focus primarily on public services. Full-time AmeriCorps and Peace Corps service counts too. “Full time” means an average of at least 30 hours per week. Teachers and other employees on contracts of eight months or more per year are considered full time for the entire year.
Your loans must be Direct Loans, including Direct Subsidized, Direct Unsubsidized, Direct PLUS, or Direct Consolidation Loans. If you have older federal loans that aren’t Direct Loans, consolidating them into a Direct Consolidation Loan makes them eligible. You also need to be repaying under an income-driven repayment plan or the standard 10-year plan, though choosing the standard plan means you’d pay off the loan before reaching 120 payments, leaving nothing to forgive. IDR is almost always the smarter pairing with PSLF because it keeps your payments low while the clock ticks toward forgiveness.
To track your progress, submit an employer certification form through the PSLF Help Tool on StudentAid.gov. Doing this annually, or whenever you change employers, ensures your qualifying payments are being counted correctly rather than discovering a problem years down the road.
Get Out of Default Through Rehabilitation
If you’ve stopped making payments and your loans have gone into default, you still have a path back. Loan rehabilitation removes the default status from your record, stops collections activity, and restores benefits like access to IDR plans and deferment options.
The process works like this: contact your loan holder, provide the required documentation, and sign a Rehabilitation Agreement Letter. You then make nine on-time, voluntary payments within a window of 10 consecutive months. For Direct Loans and FFEL Program loans, those payments must fall within that 10-month window. For Federal Perkins Loans, the nine payments must be consecutive.
Your standard rehabilitation payment is set at 15% of your annual discretionary income divided by 12. If that amount is more than you can manage, you can request an alternative payment by filling out the Loan Rehabilitation Income and Expense form. Your loan holder will review your finances and send you an adjusted payment amount within 10 business days by mail.
You’ll need to provide your latest tax transcript (no signature required) and a hand-signed copy of your IRS Form 1040 for the most recent tax year. If you live with your spouse but file separately, include their return as well. A typed or electronic signature on the 1040 won’t be accepted.
Negotiate With Private Lenders Directly
Private student loans don’t qualify for any of the federal programs above. Private lenders are not required to offer you relief, so your options depend entirely on your lender’s policies and your ability to make a case for yourself.
Start by calling your servicer and asking specifically what hardship options they offer. Some lenders will extend your repayment term, which lowers your monthly payment but increases the total interest you’ll pay over the life of the loan. Others may offer temporary forbearance, pausing your payments for a set period. Before accepting forbearance, ask three questions: Will interest keep accruing while payments are paused? Will that interest be capitalized (added to your principal balance) when forbearance ends, meaning you’ll pay interest on interest going forward? And will your monthly payment increase afterward, or will the loan term simply extend?
One easy win: many private lenders will reduce your interest rate by 0.25% if you set up automatic payments through direct debit. It’s a small savings, but it costs nothing to set up. If you’re an active-duty servicemember, the Servicemembers Civil Relief Act caps your interest at 6% on loans taken out before your military service began.
Refinancing through a different lender is another option if your credit has improved since you originally borrowed. A lower interest rate or longer repayment term can reduce your monthly payment. Just know that refinancing federal loans into a private loan means permanently giving up access to IDR plans, PSLF, and other federal protections.
Protect Yourself From Scams
Scammers aggressively target borrowers looking for student loan help, often using official-looking names, seals, and logos to appear legitimate. Everything these companies claim to do, you can do yourself for free through StudentAid.gov.
Red flags to watch for: any company that charges an upfront or monthly fee for help with forgiveness or repayment plan enrollment, promises of immediate and total loan cancellation, urgent language like “act now before the program is discontinued,” and requests for your StudentAid.gov username or password. Federal Student Aid and its partners will never ask for your password. Also look for typos, unusual capitalization, and grammatical errors in communications, which are common in fraudulent messages.
If you suspect you’ve been targeted by a scam, file complaints with Federal Student Aid, the Federal Trade Commission, and the Consumer Financial Protection Bureau. All three accept complaints online.
Where to Start Right Now
Log in to StudentAid.gov and review your loan details. You’ll see exactly which loans you have, who services them, your current balance, and your repayment status. If your loans are federal, you can apply for an IDR plan or start the PSLF process right from the site. If your loans are in default, your loan holder’s contact information will be listed there as well. For private loans, pull up your most recent statement and call the servicer number on it. Having your account number and a recent pay stub ready will make the conversation more productive.