Whether you’re desperate for an alternative now, or just curious about how to get out of student loan debt someday, it never hurts to look at your options.
As you’ll see in the following list, most of these programs have very specific eligibility requirements. But if you’re genuinely struggling to pay back your student debt, there will be a program geared towards your financial need. It all depends on what type of student loans you have.
How to get out of student loan debt
1. Income-Driven Repayment Plans
If you still have a balance at the end of a 20 to 25-year income-driven repayment plan, the remainder is forgiven. Plus, one of these plans can decrease your monthly payment, as it is based on a percentage of your discretionary income.
Just keep in mind that stretching your payments over 20 to 25 years may actually end up costing you more in the long run. And any forgiven amount at the end of the repayment period will be considered taxable income.
2. Public Service Loan Forgiveness (PSLF)
If you work in public service for 10 years, you may be eligible for this public service loan forgiveness program.
It does require that this 10 years include at least 30 hours of public service work per week. You must also have made at least 120 qualifying monthly payments under one of the income-driven repayment plans. Upon making the 120th payment, you may submit the PSLF application for forgiveness.
If it sounds like you might not qualify for PSLF, answer a few questions below so we can help point you towards other repayment options. Otherwise, scroll down to read on.
3. Perkins Loan Cancellation and Discharge
If you have a Perkins Loan, you may be able to get out of paying back student debt if you volunteer in the Peace Corps or AmeriCorps Vista program, serve in the U.S. armed forces in a hostile area, or work in a variety of other professions including teaching, medicine, social service, and law enforcement.
4. Teacher Loan Forgiveness
If you’ve been teaching full-time in a low-income school, you may be eligible for Teacher Loan Forgiveness. You may have up to $27,500 of a Perkins Loan forgiven and up to $17,500 of a Direct Loan or Stafford Loan forgiven.
5. Closed School Discharge
If your school closes before you can finish your program, then you may be eligible for a Closed School Discharge of your student loan debt. To qualify, you must either be enrolled when the school closes or have withdrawn from the school less than 120 days prior to its closing.
If you did have a chance to finish your program before the school closed, and all you need is the diploma or certificate, you are not eligible for this discharge.
6. False Certification of Student Eligibility or Unauthorized Payment Discharge
Did your school make false certifications about your eligibility for the loan, or sign your name on an application or promissory note without your permission? Did they endorse a loan check without your knowledge, then fail to give you the proceeds or put the payment toward your loan? If you answered yes to any of these questions, find out more about how to get out of student loan debt through this option. You may be eligible for this discharge.
7. Unpaid Refund Discharge
If you withdraw, the school may owe a refund to the U.S. Department of Education or lender. If the school fails to provide this refund, you may be eligible for a discharge although it will only cover the unpaid refund amount.
8. Total and Permanent Disability Discharge (TPD)
Are you a veteran with a service-connected disability? Are you receiving Social Security Disability Insurance or Supplemental Security Income? Is a medical condition preventing you from engaging in any “substantial gainful activity” for the past 60 months or the next 60 months, or expected to result in death? You may be eligible for Total and Permanent Disability Discharge. Be sure to check out how to get out of student loan debt through this program.
9. Death Discharge
It’s grim but true, and worth noting. If the borrower dies, the loan is discharged. The same is true of parents who have PLUS loans. If the parent dies, or the student, the loan is discharged.
10. Discharge in Bankruptcy
It won’t be easy, but it is possible to have your student loans discharged with Chapter 7 bankruptcy. To be considered, you must initiate an adversary proceeding by filing a Complaint to Determine Dischargeability. It is then up to you to prove that paying back your student loans will cause you undue hardship.
That said, bankruptcy should always be a last resort. Exhaust every other option for paying back your debts first, student loans included.
Any one of the links above will go into greater depth about how to get out of student loan debt. If, after delving in, you find that you don’t meet any of the criteria, there are other options. Consider better ways of managing your student loan payments and look into student loan refinancing.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|