Many student loan borrowers find themselves stuck paying off their loans for years, even decades. There exist, however, standard and some more unorthodox ways to get out of paying your student loans.
Enroll in a Federal Program
There are a number of federal programs that borrowers can enroll in to get reduced monthly payments, a deferment, or even loan forgiveness. Here are 5 different programs to help you pay off your student loans:
- Income-Driven Repayment – One of the more popular programs, IDRs help to lower monthly payments and after 20 to 25 years of payments, any remaining balance is forgiven. To request an IDR, you can fill out a form on studentloans.gov
- Deferment or Forbearance – Deferment is usually a last-ditch option for borrowers undergoing a financial hardship, granting a temporary respite from monthly payments. For some, forbearance could be another option for borrowers looking for a shorter payment pause. However this usually accrues interest on the loan during the forbearance period.
- Student Loan Repayment Assistance Programs (LRAPs) – For college graduates going into public-oriented careers, applying for a LRAP could result in a portion of their loans being forgiven. LRAPs are usually awarded based on an applicant’s income in comparison to their total debt amount.
- Closed School Discharge – To qualify for a closed school discharge, one must be enrolled in a program when the school closes or have been enrolled in the previous 120 days.
- Total and Permanent Disability (TPD) – If by some circumstance a borrower becomes disabled and unable to make student loan payments, they might qualify for a full loan discharge.
More Methods to Get Out of Paying Student Loans
If you don’t like any of the above methods, perhaps you will consider these decidedly more creative ways to get out of paying your student loans:
- Relocate to a different state – Certain states like Kansas offer incentives for out-of-state transplants. Kansas’ Rural Opportunity Zones program offers waivers of student loans of up to $15,000 over five years. Similar programs include the Opportunity Maine Tax Credit and the Hamilton Ohio Foundation.
- Talk to Cosigner – A Cosigner will be responsible for the debt once a borrower fails to make payments, so it will be in their best interest to help cover loan payments until the borrower is financially solvent.
- Employer Student Loan Benefits – The IRS recently ruled that employers could offer student loan payment matching in concert with existing 401(k) plans. This is still relatively new but could prove prevalent in the future.
The Bottom Line
Once a student loan has been taken out, the debt has to be repaid. Hopefully the suggestions above can help borrowers steer clear of default and protect their credit. And as always, the Financial Helpers are only a phone call away.
