More Student Loan Repayment Problems

What to Do If You Don't Make Enough Money to Pay Your Student Loan

I am deep deep trouble. I can’t pay my student loans.

I just don’t make enough money. I read you can’t get rid of these loans in bankruptcy. Is there anything I can do?

Mark

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Unaffordable student loans are becoming a major problem as tuition costs soar.

Financial experts recommend that students not take on more debt than they can reasonably expect to make in their first year of employment. I don't know how realistic this is, but it would help avoid many repayment problems.

Have you gone to the SallieMae website to see if a student loan consolidation or extending payments will help you?

Maybe you can qualify for a temporary deferment or forbearance. You can do all these things online on this website if you have federally guaranteed loans.

It is true that you can’t get your student loans discharged in bankruptcy. Congress has basically decided that that would be against public policy.

To make matters worse, the US Supreme Court has ruled that social security payments can be reduced to repay unpaid student loans.

The pensioner argued that he was disabled and it would be a hardship to have his social security payments cut. The Court disagreed.

In this decision the Court laid to rest for once and for all the supposed "hardship" claims raised against student loan collection in bankruptcy court.

Congress reaffirmed this in the Bankruptcy Reform Act of 2005.

If you have other debts, other than student loans, maybe you can have them discharged leaving you with enough money to pay your student loans. However, bankruptcy might not be the best option.

You will still have the student loans to deal with. If they are over half of your debt, a bankruptcy will make your life difficult without really helping you solve your problems. Bankruptcy really should your last resort.

Maybe you have to bite the bullet. You did take on the debt and agreed to repay it. So face facts and just do it.

Cut out all spending, except for food (no restaurant meals, no stopping at Starbucks, etc). Get a part time job or open a business you can run from home part-time. [In my opinion, the only road to financial freedom is to be self employed.]

And/or have a friendly meeting with your current boss. Point out how useful you are to your organization and that you’re having trouble with your education loans.

Ask for a reasonable raise. You just might get it, especially if you stress that it is the high cost of your education that is causing you problems.

Don’t look at your overall debt and despair. Just tell yourself that you’re sick and tired of this situation and you’re going to do something about it.

Use everything extra cent you save and earn to pay down the debt. Overpay your loans a little at a time until they start to become manageable as your income rises.

I wish you luck. It won’t be easy at first. But once you start to succeed at reducing your debt, you’ll feel better about yourself.

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