• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

The College Investor

Student Loans, Investing, Building Wealth

  • About
  • Podcast
  • Research
  • Contact
  • Save For College
      • How To Start

      • How To Save For College
      • How To Pay For College
      • What Is the Average Cost of College?
      • What Is A 529 Plan and Where to Open One in Your State
      • How Much Should You Have In A 529 Plan By Age
      • How To Use A 529 Plan For Private Elementary And High School
      • What Are Qualified Expenses For A 529 Plan (And What Doesn’t Count)?
      • The Best Brokers To Open A 529 Plan
      • Tools + Accounts

      • 529 Plans: The Ultimate College Savings Plan
      • 529 Plan Contribution Limits
      • Prepaid Tuition Plans | What To Know
      • Understanding And Using 529A ABLE Accounts
      • Using A Roth IRA To Save And Pay For College
      • FAFSA Deadlines for Financial Aid
      • CollegeBacker Review
      • Upromise Review
      • UNest Review
      • Other Options

      • Student Loan And Financial Aid Programs By State
      • The Guide To Military And VA Education Benefits
      • How To Fill Out The FAFSA
      • How To Find College Scholarships
      • The Best College Scholarship Search Websites
      • How To Find Grants To Pay For College
      • Pell Grants: What They Are And How To Qualify
      • Understanding Federal Work-Study
      • How To Use A 529 Plan If Your Child Doesn’t Go To College
  • Student Loans
      • Borrowing

        • How Student Loans Work
        • How To Apply For A Student Loan
        • Best Student Loans And Rates In January 2023
        • 10 Best Private Student Loans Of January 2023
        • Best Student Loans To Pay For Graduate School
        • Best Student Loans To Pay For Medical School
        • Parent Loans To Pay For College
        • No-Cosigner Student Loan Options
        • Guide To Income Sharing Agreements (ISAs)
        • Best International Student Loans
      • Get Out Of Debt

        • Best Student Loan Refinance Companies In January 2023
        • Best Student Loan Repayment Plans
        • Best Student Loan Refinancing Bonuses And Promotional Offers Of January 2023
        • Student Loan Forgiveness Programs (The Complete List)
        • The Full List Of Student Loan Forgiveness Programs By State
        • Public Service Loan Forgiveness (PSLF)
        • Top Student Loan Scams
        • Average Student Loan Monthly Payment
        • Average Student Loan Debt By Year
      • Reviews

        • Credible Review
        • Splash Review
        • Ascent Review
        • Citizens Bank Review
        • Commonbond Review
        • Earnest Review
        • ELFI Review
        • Laurel Road Review
        • LendKey Review
        • SoFi Review
  • Investing
      • How To Start

        • How To Start Investing in High School
        • How To Start Investing In College
        • How To Start Investing In Your Twenties For 22 – 29 Year Olds
        • How To Start Investing In Your 30s For 30 – 39 Year Olds
        • How To Start Investing With $100 Or Less
        • How To Give Kids The Gift Of Stock
        • What Is Dividend Growth Investing
        • IRA Rollover Chart
      • Tools + Accounts

        • Best Online Stock Brokers
        • The Best Traditional And Roth IRA Accounts
        • The Best Robo-Advisors
        • The Best Investing Apps
        • The Best Places to Trade Options
        • The Best Places To Open A Health Savings Account
        • The Best Solo 401k Providers
        • The Best Self-Directed IRA Providers Of 2023
        • Best Cryptocurrency Exchanges
      • Reviews

        • Vanguard Review
        • Fidelity Review 2023
        • M1 Finance Review
        • TD Ameritrade Review 2023
        • Charles Schwab Review
        • Robinhood Review
        • Webull Review
        • Betterment Review 2023
        • Wealthfront Review
  • Earn More Money
      • Extra Income

        • 20 Best Side Hustles You Can Start Earning With In 2023
        • 53 Side Hustle Ideas To Make Money Fast
        • 100 Ways To Make Money In College
        • 80 Ways To Make Money From Home In 2023
        • 5 Quick Money Making Ideas (That Take Less Than 1 Hour)
        • 10 Interesting Ways You Can Make Money Driving
        • High-Paying Side Gigs That Earn $1,000 or More Per Month
        • The 10 Best Money-Making Apps
        • Paid Surveys: Earn Money For Giving Your Opinion Online
        • 10 Crazy Ways To Make $10,000 You’ve Never Heard Of
      • Build Wealth

        • 40 Passive Income Ideas You Can Use To Build Wealth In 2023
        • 3 Ways To Make $50,000 Per Year Without Working With Passive Income
        • How To Become A Real Estate Investor With Just $500
        • 15 Best Online Business Ideas
        • Residual Income: 7 Super Smart Ways to Build It
        • The Most Common Multiple Income Streams
        • How To Become A Real Estate Mogul With Only $10,000
      • Reviews

        • Fundrise Review
        • RealtyMogul Review
        • FarmTogether Review
        • AcreTrader Review
        • Swagbucks Review
        • Survey Junkie Review
        • TopCashback Review
        • DoorDash Review
  • Personal Finance
      • Banking

        • 10 Best High Yield Savings Accounts Of January 2023
        • 10 Best Money Market Accounts Of January 2023
        • 10 Best Free Checking Accounts In January 2023
        • Best Bank CD Rates Of January 2023
        • 10 Best Business Checking Accounts In January 2023
        • Best Online Banks Of January 2023
        • Best Credit Unions Nationwide Of January 2023
        • Best College Student Checking Accounts Of January 2023
      • Insurance

        • Best Life Insurance Companies
        • Renters Insurance
        • Car Insurance
        • Pet Insurance
        • Umbrella Insurance
        • Disability Insurance
        • Tuition Insurance
        • Travel Insurance
      • Credit Tools

        • Best Budgeting Apps
        • Cash Advance Apps
        • How To Get A Free Credit Score Report
        • Best Credit Monitoring Services For 2023
        • Debt Settlement: Inside The Secret World
        • Credit Repair Explained: Should You Pay For Help?
        • Best Personal Loan Companies And Lenders
        • Online Loan Companies To Borrow From Home
      • Tax

        • Best Tax Software
        • Free Tax Software
        • IRS Tax Refund Calendar
        • Common IRS Questions and Errors
        • Federal Tax Brackets
        • Capital Gains Tax Brackets
        • 401k Contribution Limits
        • IRA Contribution Limits
        • HSA Contribution Limits
  • Forum
  • Search
Home » Student Loans » Private » What To Do If You Can’t Afford Your Private Student Loans

What To Do If You Can’t Afford Your Private Student Loans

Updated: October 23, 2021 By Robert Farrington

Tweet
Share31
Share
Pin25
Email
Print

At The College Investor, we want to help you navigate your finances. To do this, many or all of the products featured here may be from our partners. This doesn’t influence our evaluations or reviews. Our opinions are our own. Any investing information provided on this page is for educational purposes only. The College Investor does not offer investment advisor or brokerage services, nor does it recommend buying or selling particular stocks, securities, or other investments. Learn more here.Advertiser Disclosure

There are thousands of financial products and services out there, and we believe in helping you understand which is best for you, how it works, and will it actually help you achieve your financial goals. We're proud of our content and guidance, and the information we provide is objective, independent, and free.

But we do have to make money to pay our team and keep this website running! Our partners compensate us. TheCollegeInvestor.com has an advertising relationship with some or all of the offers included on this page, which may impact how, where, and in what order products and services may appear. The College Investor does not include all companies or offers available in the marketplace. And our partners can never pay us to guarantee favorable reviews (or even pay for a review of their product to begin with).

For more information and a complete list of our advertising partners, please check out our full Advertising Disclosure. TheCollegeInvestor.com strives to keep its information accurate and up to date. The information in our reviews could be different from what you find when visiting a financial institution, service provider or a specific product's website. All products and services are presented without warranty.

This is one of the toughest questions I get asked: I can't afford my private student loans and I don't see any options to get out of it - what do I do?

It's estimated that over 1.4 million borrowers have private student loan debt, with an outstanding balance of over $130 billion in loans. And the tough part is many of these borrowers took out the private loans without fully understanding what they were getting into.

The fact is, private student loans function much more closely to a car loan or mortgage. They typically have a set repayment plan, and failure to repay that amount send it into delinquency and default. And since the collateral for student loans is your earnings, the lender could take you to court and get a judgement against you.

Not pretty.

So, what can you do if you can't afford your private student loans? Here are your options.

Table of Contents
The Best Option: See What Help Your Lender Can Offer You
The Second Best Option: Refinance Your Private Student Loans
A Must-Do Option: Earn More Money
Create The Proper Repayment Plan For Your Private Student Loans
The Worst Option: Default And Attempt To Settle Your Debt
Final Thoughts

The Best Option: See What Help Your Lender Can Offer You

If you can't afford your loans, the first thing you need to do is call your lender and see if they can help you. Some private lenders (not many, but some), do offer assistance programs that can potentially help you stay current with your loans.

For example, SoFi has a Unemployment Protection Program where they will place your loans into a 12 month forbearance if you are unemployed. You have to show proof of your unemployment (by showing your eligibility for unemployment benefits) and you also need to work with their Career Strategy department to help you get a job.

Another example is Sallie Mae. They offer private student loan forbearance if you are experiencing a financial hardship. However, in order to qualify, borrowers must make a good faith payment of $50 for each loan (up to $150 per account) to put the loan into forbearance. And borrowers need to remember that interest will continue to accrue on the loan.

Remember, this are not designed to be complete solutions to affording your private student loans, but they can offer you some relief until you can figure out a way to afford your private student loans.

The Second Best Option: Refinance Your Private Student Loans

The next best option is to refinance your private student loan into a new loan - hopefully with a better interest rate and terms that you can afford.

To refinance, we recommend that borrowers try Credible. Credible is a student loan comparison platform that allows you to easily see in just 2 minutes what you would qualify for. If you think one of the options makes sense for you, it only takes about 5 more minutes to apply - super easy. Plus, College Investor readers will get a special gift card bonus of up to $1,000 when they refinance!

Checking your rates and seeing what you might qualify for doesn't impact your credit score, so give it a try: Credible Refinancing. It honestly takes about two minutes.

If you're not having luck with Credible, you can check out Yrefy. Yrefy is a specialized lender that focuses on refinancing private student loans in default. Check out Yrefy here.

There are two main challenges that most people will encounter when it comes to refinancing your private student loans:

  1. Not having a good enough credit score or history
  2. Needing to have a cosigner to qualify

Unlike Federal student loans, private student loans rely on a borrowers' credit score (among other factors) to make a decision. Given that most borrowers who can't afford their private student loans typically struggle to make payments on time, or may have other credit factors negatively impact them, having a poor credit score could be a challenge.

We recommend that anyone with student loans should be monitoring their credit score and history with a free tool like Credit Karma. If you have less than perfect credit, Credit Karma will also give you suggestions to improve your credit, which in turn will help you qualify to refinance your student loans.

The other big challenge is that many lenders require a cosigner to qualify - even if you've improved your credit or have great credit. In many cases this is due to borrowers being young and not having a robust credit history. The challenge with getting a cosigner is that there is huge risk for the cosigner, and many people (including myself) recommend people to never cosign a student loan.

However, if you do get a cosigner, there is a proper way to do it. Make sure you fully understand how to cosign a student loan to minimize risk.

A Must-Do Option: Earn More Money

No matter what your student loan situation is, every borrower should focus on earning more money. But this is especially true if you can't afford your private student loans.

The simple fact is, there are 168 hours in each week. You might work 40-50 hours at your day job. You sleep 7 hours per night, so a total of 49 hours per week. For simplicity, let's call that 100 hours. What are you doing with the remaining 68 hours each week?

For too many people, they are spending money they don't have. Whether they are at home watching TV (and paying for cable and Netflix), or out to dinner with friends or family (spending on food an alcohol), they are wasting money.

But I'm not here to tell you to budget more to afford your loans - you probably already know that. I'm here to tell you that you can also earn more money. Most borrowers I see struggling to make their student loan payments are only falling short by $100 to $200 per month.

In the big picture, $100 or $200 per month is really not a lot of money. $200 per month is $2,400 per year. Anyone who really tries could earn that extra money.

Here two some examples to earn $200 per month right now:

  • Deliver for Doordash: You can make money delivering food on your time. 
  • Donate Plasma: You can get paid about $50 for donating plasma - so you can do this once a week for a month

Here's a list of the best side hustles.

The fact is, many people will complain about not being able to afford their private student loans, but few will actually take action to change their situation. If you're ready to change and earn more, here is another list of over 50 ways to make money on the side.

Create The Proper Repayment Plan For Your Private Student Loans

If you have private student loans, the key to making them affordable is to create the proper repayment plan for all of your student loan debt. This isn't always easy, and each person will have a different preference, but here's how to think about it.

First, handle your Federal loans. These loans typically have more repayment options, and you might benefit from setting up an income-based repayment plan. These plans will lower your monthly payment to 10% or 15% of your discretionary income. That can be a huge help in being able to afford your student loans.

Once you're set on your Federal loans, move to your private loans. For your private loans, you need to decide if the debt snowball or debt avalanche makes more sense for you. Remember, the snowball is about starting with your smallest balance first. The avalanche is about starting with your highest interest rate first.

Mathematically, the highest interest rate first is usually better. But mentally, getting rid of some small private student loans first can be a huge early win.

The Worst Option: Default And Attempt To Settle Your Debt

The worst option for your private student loans is default. Defaulting on any type of student loans can wreck your credit, prevent you from getting future student loans, and could even cost your your job.

The sad part is I see too many borrowers get caught up in the student loan scam that is private student loan debt settlement. This is a scam where a company (or even sometimes a law firm) will encourage borrowers to stop making payments on their student loans, and instead make payments to the student aid company or law firm. Over time, the borrower's student loan goes into default, trashing their credit score. Meanwhile, the aid company is taking in their payments happily.

However, the whole scam falls apart in the end - the lender doesn't have to agree to any settlement, and will likely tack on fees for the defaulted loan. The borrower is out all of the money they paid the aid company, and they will still owe the student loan. It's lose-lose all around.

Finally, it's important to remember that your lender can sue you if you default. And private student loan default can lead to costly litigation - you're going to have to pay a lawyer to defend you, and then you'll still owe on the judgement in the end.

The only guarantee with student loan default is wrecked credit and harassment from debt collectors. That's why, as a general rule, we believe you should avoid default if at all possible.

Final Thoughts

While there are no amazing repayment options or forgiveness programs for private student loans, there are simple actions you can take if you can't afford them.

These options aren't glamorous, and most require work, but you can work to make your private student loans more affordable.

And remember, it's universally a good idea to focus on earning more money to get out of student loan debt.

Are you struggling to afford your private student loans?

Robert Farrington
Robert Farrington

Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.

He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.

He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.

What To Do If You Can’t Afford Your Private Student Loans
Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or other advertiser and have not been reviewed, approved or otherwise endorsed by any of these entities.
Comment Policy: We invite readers to respond with questions or comments. Comments may be held for moderation and are subject to approval. Comments are solely the opinions of their authors'. The responses in the comments below are not provided or commissioned by any advertiser. Responses have not been reviewed, approved or otherwise endorsed by any company. It is not anyone's responsibility to ensure all posts and/or questions are answered.
Subscribe
Connect with
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
Notify of

I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree

35 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Primary Sidebar

Robert Farrington will teach you how to get out of student loan debt and how to start investing.

Hi! My Name is

America's Millennial Money Expert

Welcome to The College Investor. We're here to help you escape student loan debt so you can start investing and building wealth for the future

Our expert guides, reviews, and more are designed to help you achieve your financial goals.

Want to learn more? See what's in my wallet.

As Featured In

Social Media

Popular Posts

Side Hustling

53 Side Hustle Ideas To Make Money Fast

Best Side Hustles

20 Best Side Hustles You Can Start Earning With In 2023

Crazy Ways To Make $10,000

10 Crazy Ways To Make $10,000 You’ve Never Heard Of

Make $50,000 Per Year

3 Ways To Make $50,000 Per Year Without Working With Passive Income

Student Loan Scams

Top Student Loan Scams

Net Worth of Millennials

Average Net Worth Of Millennials By Age

Ways To Get Student Loan Forgiveness

Student Loan Forgiveness Programs (The Complete List)

529 Plan By Age

How Much Should You Have In A 529 Plan By Age

Passive Income Ideas

40 Passive Income Ideas You Can Use To Build Wealth In 2023

Make Money From Home

80 Ways To Make Money From Home In 2023

Ultimate Guides

529 Plan Guide

529 Plans: The Ultimate Guide To College Savings Plans

Student Loans and Financial Aid By State

Student Loan And Financial Aid Programs By State

Student Loan Advice

The Definitive Guide To Student Loan Debt

Student Loan Forgiveness By State

The Full List Of Student Loan Forgiveness Programs By State

newretirement

How to Start Saving Now: The College Graduate’s Guide to Saving for Retirement

Latest Research

How much to file taxes

Tax Survey: How Much People Paid To File And The No.1 Tax Software They Used

Inflation survey

Side-Hustles To The Rescue: Survey Shows 86% Stressed About Money & Inflation

students choose to work survey

75% Of Students Would Still Choose To Work Even If They Didn’t Have To

Institutional Merit Grants

Who Gets Institutional Merit Grants At Private Colleges?

Resume Student Loan Payments

Survey: Even With Higher Expenses, Most Student Loan Borrowers Are Ready To Resume Payments

Footer

Who We Are

The College Investor is an independent, advertising-supported financial media publisher, focusing on news, product reviews, and comparisons.

Connect

  • Contact Us
  • Advertise
  • Press & Media

About

  • About
  • Our Team
  • Podcast
  • Editorial Guidelines
  • How We Make Money
  • Archives

Social

Copyright © 2023 · The College Investor · Privacy Policy ·Terms of Service · DO NOT Sell My Personal Information

wpDiscuz