What to do when you can't make student loan payments

For borrowers facing financial hardship, job loss, or a payment that has grown unaffordable, the order of actions matters. Skipping straight to forbearance or stopping payments silently can cost thousands in capitalized interest and credit damage. Work through the steps below from top to bottom before choosing a payment pause. This guide focuses on federal loans; private lenders follow their own hardship policies and generally offer fewer long-term relief options.

The goal is not to avoid paying forever — it is to choose the least costly path that keeps your account in good standing while your income recovers. Income-driven repayment often produces a lower monthly payment than forbearance with no capitalized interest on SAVE when your payment is below monthly interest. Modeling a pause with the deferment cost calculator can make those tradeoffs concrete before you call your servicer.

The most important rule: don't just stop paying

Step 1: Consider income-driven repayment (or recertify)

If you are not on an income-driven repayment (IDR) plan, consider applying for SAVE or another IDR plan at studentaid.gov/idr.^[1] The application takes roughly 15–20 minutes. Your payment is calculated as a percentage of discretionary income. If your income is low or zero, your payment could be $0 per month — and those $0 payments may still count toward IDR forgiveness and PSLF when other requirements are met.

If you are already on IDR and your income has dropped since your last certification, you may submit a new income recertification before the annual deadline. You do not have to wait for the anniversary. Your payment can adjust within about 30 days, sometimes to $0. Use the plan comparison calculator to see how each plan compares at your current income, and read the first 90 days guide if you are new to repayment and have not yet enrolled in a plan.

Step 2: Deferment options and what each covers

Deferment pauses required payments for a defined period. Unlike forbearance, certain deferment types stop interest on subsidized loans.^[2] Deferment months do not count toward PSLF or IDR forgiveness — which is why a $0 IDR payment is usually preferable when you qualify.

Step 3: Forbearance — and why it may be a last resort

General forbearance is available at servicer discretion for up to 12 months at a time, but interest accrues on all loan types — including subsidized loans.^[2] Unpaid interest may capitalize at the end of forbearance, increasing your principal and every future payment. Forbearance months generally do not count toward PSLF or IDR forgiveness. If you use forbearance, consider limiting it to the shortest period you need and modeling the cost first with the deferment cost calculator.

One exception worth knowing: while an IDR application is processing, you may receive administrative forbearance. Some of those months can count toward PSLF if you later receive credit for qualifying payments — but rules vary by situation. Ask your servicer in writing whether processing forbearance months will count before relying on them.

When you have private loans

Private student loans do not offer federal IDR, PSLF, or standardized deferment types. Each lender sets its own hardship, forbearance, and modification policies. If you cannot pay a private loan, contact the lender early and ask about temporary payment reductions, interest-only periods, or term extensions. Refinancing to a lower rate may help if your credit and income qualify, but refinancing federal loans into private debt removes federal protections permanently. The state vs. federal reference compares relief options side by side.

If you hold both federal and private loans and have limited cash, many borrowers prioritize keeping federal loans current while negotiating with private lenders — federal default consequences include wage garnishment and tax refund offset without a court order.^[5] That does not mean ignoring private loans, but the sequence of outreach can matter when you cannot cover everything at once.

If you're already delinquent

Delinquency (1–269 days past due) damages credit, but early action can sometimes cure it. Contact your servicer as soon as you can. Making a payment may restore good standing if you are early enough. Ask about switching to a lower payment plan going forward. Payments 90 or more days late are often reported to credit bureaus — but curing delinquency can stop further damage. Document every call: date, representative name, and what was promised.

If you are between 60 and 270 days past due, time matters. Each month brings you closer to federal default at 270 days. Before that threshold, IDR enrollment, rehabilitation planning, or a short forbearance with a clear exit date may still be available. After default, your options narrow and collection costs can apply.

If you're already in default: rehabilitation and consolidation

Federal default occurs at 270 or more days past due.^[3] You may have several paths out, depending on your loan status and timing:

Loan rehabilitation: Make nine voluntary, reasonable, and affordable payments within ten months. The default notation may be removed from your credit report and you can regain IDR eligibility. Rehabilitation is generally available once per loan.

Loan consolidation: Consolidate defaulted loans into a Direct Consolidation Loan. This path is often faster than rehabilitation, but the default notation may remain on your credit report. You may then enroll in IDR if you qualify.

Fresh Start: A federal initiative that allowed some defaulted borrowers to return to good standing automatically. Check studentaid.gov for current availability — this program has been time-limited and may not apply to your situation.^[4]

Default also triggers collection actions: wage garnishment of up to 15% of disposable pay, seizure of federal tax refunds, and loss of eligibility for new federal aid until resolved.^[5] Getting out of default does not erase past interest, but it restores access to IDR and stops many collection tools. If you are pursuing PSLF, see the PSLF checklist after rehabilitation — qualifying payments generally do not count during default.

Document everything in writing

Phone calls can help, but written records protect you if a servicer later disputes your plan enrollment, deferment dates, or payment count. After each call, send a secure message summarizing what you discussed and what you were told. Save confirmation numbers for IDR applications, deferment approvals, and PSLF forms. If a representative promises a $0 payment or a processing forbearance, ask for the expected start and end dates in writing.

The read your statement reference can help you verify that payments posted correctly after any plan change. Small discrepancies caught early are easier to fix than errors discovered years later.

The $0/month IDR payment is often preferable to forbearance

When to seek additional help

Most borrowers can resolve payment problems through their servicer and Federal Student Aid resources. If you are in default with wage garnishment active, consider speaking with a nonprofit credit counselor or legal aid organization familiar with student loans. The FSA Ombudsman at studentaid.gov/feedback-center can help when servicer disputes stall. This guide is educational — it does not provide legal advice about bankruptcy, defense to repayment, or borrower defense claims, which are separate specialized processes.