Listen, there are a lot of student loan relief options out there. And the closer we get to federal student loan payments starting back up, the more you’re going to hear about all the possible “solutions” for managing your loan payments. But most of them don’t actually give you the relief you’re looking for. Let’s talk about some of the most common types of federal student loan help and what they really mean for you in the long run.

Student Loan Deferment

Student Loan Forbearance

Income-Driven Repayment Plans

Student Loan Consolidation

Service Member Benefits

Student Loans and Bankruptcy

Student loan deferment is a way to stop paying on your federal student loans—temporarily.

You might qualify for deferment if you’re:

• Currently in school
• Currently unemployed
• In the military
• Being treated for cancer
• Having a financial hardship (that means you can’t afford to pay your bills—and you can prove it)

The length of a deferment depends on the type. For example, students enrolled in eligible colleges and programs may qualify for an In-School Deferment for the entire time they’re enrolled and possibly up to six months after they leave. And an Economic Hardship Deferment can last up to three years.

With deferment, interest may or may not keep adding up while your payments are paused—but it depends on the loan. For deferred subsidized federal student loans or Perkins loans, you don’t have to pay for the interest, and more interest doesn’t build up. But for other types of student loans, the interest does build up during deferment. That means your loan balance (what you owe) could be higher when the deferment period is over.

Most borrowers have recently gotten a taste of student loan forbearance. Because of the CARES Act, federal student loans were automatically put into forbearance since March 2020. But student loan forbearance works very differently from what borrowers have experienced over the last few years.

Normally, when a student loan is in forbearance, payments are put on hold—but the loan continues to build up interest. In other words, the amount you owe increases. Sometimes a lot. You might be hitting the pause button on payments, but your balance is getting bigger the whole time.

So, if you think you can just reapply for forbearance once the pause ends, know that it’s not going to be the zero interest you’ve gotten used to. Student loan interest kicks back in September 1—which means, you won’t be able to just sit back and not pay on your student loans anymore without expecting a bigger balance in the end.

There are two types of forbearance: general and mandatory. In a general forbearance, you make a case for why you can’t keep up with the payments, and then the lender decides to approve or deny your request.

You can apply for general forbearance if you have:

• Financial difficulties
• Medical expenses
• Change in employment
• Other reasons you can’t cover your loan payments

If you think you qualify, you can submit a general forbearance request, and the loan provider will review it. But keep in mind, only Direct Loans, Federal Family Education Loan (FFEL) Program loans and Perkins loans are eligible for general forbearance.

Mandatory forbearance is, well, mandatory. That means if you qualify, the loan provider has to accept your request.

You may qualify for mandatory forbearance if:

• You have a Direct loan or FFEL Program loan.
• You’re serving with AmeriCorps, working in your medical or dental internship or residency, or working as an activated member of the National Guard.
• The total amount you owe every month for all your federal student loans is 20% or more of your total monthly income.

But here’s the deal: When you put your student loans into deferment or forbearance, you risk losing control of your debt. You may feel some relief in the moment, but your debt isn’t going away. You’re only pushing it in a corner to deal with later. Plus, your student loans could keep growing interest even while they’re in deferment (they definitely will if they’re in forbearance). That just means your problem will keep getting bigger and bigger.

If you’re having trouble making your student loan payments, your loan servicer may try to talk you into an income-driven repayment plan (IDR).

Basically, income-driven repayment plans give you a lower monthly payment and a much longer loan term—usually 20 or 25 years. And there’s also a theoretical promise to forgive any remaining balance at the end of the term, but this rarely works out and it has a lot of conditions around it.

IDRs are offered as a way to help borrowers with really big student loan balances and not a lot of income stay on top of their student loan payments. But that’s assuming your debt amount and your income will stay the same—which isn’t the case.

As your income grows (and it should be growing), your debt will shrink because you’re able to throw more money at it. But with IDRs, the opposite happens. You’re locked into making very small payments. Meanwhile, your student loan continues to grow because interest is being added faster than you can make a dent in it. Imagine paying on your student loan for over two decades, only to have it be even more out of control than when you started!

When President Biden announced his student loan forgiveness plan in August 2022, he also proposed a rule to create a brand-new income-driven repayment plan. Nothing’s set in stone yet, but this new IDR would allow lower-income borrowers to pay way less on their student loans each month and keep interest from ballooning their loan balance out of control. Sure, the promise of a lower monthly student loan payment and possible forgiveness sounds nice. But smaller payments equal smaller progress on your debt.

Just so we’re clear: We do not recommend relying on an income-driven repayment plan (or any payment plan, for that matter) as your best strategy to get rid of your debt. They drag out your loan for way longer—which means you’ll pay way more over time. Not. Worth. It.

Your best bet is to get a bigger shovel (aka income) and use the debt snowball method to dig yourself out of student loan debt as fast as you can!

Student loan consolidation combines your different student loans into one new loan. Instead of having to pay multiple payments to multiple lenders, you only have to pay one monthly payment.

Technically speaking, only federal student loans can be consolidated. Everything else (private student loans or a mix of private and federal loans) has to be refinanced.

Quick disclaimer: Student loan consolidation is the only form of debt consolidation we recommend—and only on a case-by-case basis. It isn’t right for everyone, and once you consolidate, it can’t be undone. So, be sure to read through all the pros and cons before you make your decision.

The upside of consolidating your student loans is that it lets you make one payment under one loan servicer. It can also trade any variable rates you have for a fixed rate—so you don’t have to stress about your interest shooting up suddenly. And if you’ve defaulted on your student loans, consolidation can help you get back in good standing.

But there are also some downsides to student loan consolidation. It usually lengthens your loan term—meaning you’ll have a lower monthly payment, but you’ll also be making more payments in the long run. Plus, consolidation won’t get you a lower overall interest rate (it just averages the rates you already have), so you won’t save any money on that end.

The best question to ask is this: Would you rather knock out your student loans one at a time or focus your energy on one larger loan (with a fixed interest rate)? Whatever you do, don’t just sit back and only make the minimum payment. Attack your student loans with everything you’ve got so you can get them out of your life for good!

Military service members may be eligible for several programs that help with student loans. If that’s you, here are a few of those benefits:

• Interest Rate Reductions: The Servicemembers Civil Relief Act (SCRA) limits your interest rate to 6% while you’re on active duty—and if you’re serving in a hostile area, you may even qualify for 0% interest.
• Payment Reduction: In certain situations, the HEROES Act waiver may allow you to extend your general income-based repayment options if they expire while you’re on active duty.
• Postponed Payments: For federal loans only, Military Service Deferment allows you to postpone monthly payments during and right after certain forms of active duty.
• Post-Active Duty Student Deferment: This program can allow you to put off payments after active duty if you plan to go back to school.
• National Guard Duty Mandatory Forbearance: This was created for National Guard members who don’t qualify for the Military Service Deferment.

But even if you qualify for any of these, it should not be your main plan of attack to get rid of your student loans. Don’t let an interest rate reduction or deferment be an excuse to slow down on paying off your loans quickly and getting them out of your life forever.

You might be thinking you can just declare bankruptcy to make your student loans disappear—but that’s not exactly the case. As a general rule, student loans can’t be erased through bankruptcy. But there’s the rare chance of student loans being discharged through something called an adversary proceeding. It’s a separate process from normal bankruptcy where you have to prove to the bankruptcy court that repaying your student loans would “impose undue hardship on you and your dependents” (meaning you wouldn’t be able to eat if you paid your student loan payments).¹⁵

If the court decides you pass the undue hardship test, you may have some or all of your student loans discharged, or you may be put on a new repayment plan that allows you to make a lower monthly payment. But the odds aren’t great. Less than 1% (0.1% to be exact) of people who try to have their student loans discharged through bankruptcy are actually successful.¹⁶ Plus, bankruptcy is a long and brutal process that should be avoided at all costs. There are steps you can take to help you get out of debt—without putting yourself through the emotional stress of bankruptcy.