3 Student Loan Relief Options That Actually Work

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Repaying your student loan debt can feel overwhelming, particularly when you’re in a tough financial place. It may seem like you’re buried in debt that will never go away. You may even be depressed about your student loans. However, you should understand that there are student loan relief options available to you.

Student loans allow for far more flexibility than a lot of other debt, particularly for borrowers who are struggling financially. Here are some ways you can find student loan relief.

Income-driven repayment, deferment and forbearance
Look into student loan forgiveness options
Consider if refinancing or consolidation are right for you

Income-driven repayment, deferment and forbearance

If you’re struggling to make your student loan payments, the first thing you should do is contact your lender or servicer. That’s your starting point to find out what your options are when you are looking for student loan relief. Contact them to ask about your situation and see what sort of relief options are available to you.

Not sure where to start? Get information from the National Student Loan Data System.

Typically, you’ll have more options to consider with federal loans than with private loans, where programs will vary much more by lender.

So what might some of these options be?

  1. Income-driven repayment: With federal student loans, you have the option of choosing an income-driven repayment plan. These plans can help you lower the amount of your monthly loan payment, based on your income. You might potentially be able to lower your payment to 10% of your discretionary income. There are several income-driven plans you can choose from, and each will have different qualifications. They include Income-Based Repayment (IBR) repayment, Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE) and Income-Contingent Repayment (ICR).For both IBR and PAYE, you must demonstrate clear financial need. REPAYE and ICR plans are more flexible. If you think this might be the right option for you, you can request a form from your loan servicer or go directly to StudentLoans.gov. See our IBR, PAYE, REPAYE and ICR calculators to further explore whether these programs might be right for you.
  2. Deferment: With a student loan deferment, you can pause your loan repayments for up to three years. You may have this option with both federal and private loans, although you’ll likely find more options and flexibility with your federal loans. With a deferment, interest may be paused for subsidized loans but may continue to accrue for your unsubsidized loans. This means your balance will continue to grow while you avoid making monthly payments, so this is something to keep in mind.You may want to continue to at least pay your interest while you are in a deferment period. See our deferment calculator to further explore this option.
  3. Forbearance: As with deferment, forbearance allows you to put off making student loan payments for a period of time, typically up to one year. Again, it will be easiest to get a forbearance with a federal loan, but private loans may offer them, too. With a forbearance, interest typically always accrues, so, again, your balance will grow in the year when you aren’t making payments. Pay your interest only if you are able to; this will still be a lot less than your typical monthly payment.

Consider looking into the income-driven payment plans before deferment or forbearance, particularly because the government may pay all or a portion of the interest that isn’t covered by your monthly payment with the PAYE, REPAYE and IBR plans. Whichever option you choose, you will get some relief from that monthly payment pressure.

Look into student loan forgiveness options

If you have federal loans and work at certain jobs, you may be in luck.

The Public Service Loan Forgiveness program offers qualified applicants the option to forgive their debt after 10 years of consistent repayment. This is a great option for those who are working for the greater good, but not bringing in the big bucks to pay back their loans.

To qualify, you need to:

  • Make 120 on-time, full, scheduled monthly payments on your Federal Direct Loans.
  • Make all of your payments under a qualifying repayment plan. IBR, PAYE and ICR programs all qualify for Public Service Loan Forgiveness.
  • Work full-time at a qualifying public service organization. These include federal, state and government organizations, as well as 501(c)(3) non-profit organizations.

To get started, you can fill out the Employment Certification form and submit it to FedLoan Servicing. They will review your form and let you know if you qualify.

If you’re a teacher, there are also special programs that may help you with your loans. Check out student loan forgiveness for teachers options here.

See our student loan forgiveness calculator to further explore this option.

Consider if refinancing or consolidation are right for you

Are you struggling with high interest rates that prevent you from making progress? Do you feel like you’re managing loans from various lenders and can’t keep them straight? Then student loan consolidation and refinancing might be a good option for you.

Through refinancing, you typically look for a better interest rate and can consolidate your loans into one monthly payment. Essentially, you are taking out one loan to pay off all your other loans, but, in return, you have one payment and a lower interest rate.

Refinancing often works best with private student loans, but it’s also possible to refinance federal student loans, too. However, you will have to refinance with a private lender, which means you give up the benefits that automatically come with having federal loans, such as income-driven repayment and loan forgiveness programs. This means you should think carefully before you take this step.

With consolidation, you can stick with a federal loan that combines all your loans into one. It’s unlikely you’ll be able to significantly lower your interest rate in this case, as your new rate will be an average of your previous multiple loans. Also, If your monthly payment is decreased this likely means you’ll pay your loans for a longer time and end up paying more interest in the long term. But you may prefer having one payment and one interest rate as opposed to several at once.

If you do decide that refinancing is right for you, check out various student loan refinancing lenders that can help you get your best rate and plan so that you can effectively manage your student loans.

Check out Student Loan Hero’s refinancing and refinancing vs. consolidation calculators to further explore these options.

Assessing your choices for student loan relief

Student loan debt can cause serious stress. But student loans offer flexibility that many other loans cannot, particularly if you are dealing with federal loans. Understanding your options can help your stress levels decrease.

Be sure to consider your choices as soon as you feel like you might be heading into trouble paying back your loan. You never want to miss a payment, or even worse go into default on your student loans, as this will have a very negative effect on your credit score.

If you are feeling particularly overwhelmed, you may want to talk to a student loan counselor. However, before you actually pay for a counselor, consider these options first.

Rebecca Stropoli contributed to this report.

Interested in refinancing student loans?

Here are the top 6 lenders of 2020!
LenderVariable APREligible Degrees 
1.99% – 5.64%1Undergrad
& Graduate

Visit Earnest

1.89% – 5.90%2Undergrad
& Graduate

Visit Laurel Road

2.25% – 6.28%3Undergrad
& Graduate

Visit SoFi

1.89% – 6.77%4Undergrad
& Graduate

Visit Splash

2.39% – 6.01%Undergrad
& Graduate

Visit Elfi

1.99% – 5.61%5Undergrad
& Graduate

Visit CommonBond

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

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 2.98% APR (with Auto Pay) to 5.79% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.64% 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 July 31, 2020, 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 7/31/2020. 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 [email protected], or call 888-601-2801 for more information on our student loan refinance product.

© 2020 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

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.

KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

This information is current as of September 9, 2020. Information and rates are subject to change without notice.
 


3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 2.99% APR to 6.28% APR (with AutoPay). Variable rates from 2.25% APR to 6.28% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.25% APR assumes current 1 month LIBOR rate of 0.18% plus 2.32% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. See eligibility details. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. 

4 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of September 10, 2020.


5 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. 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 0.16% effective Sep 1, 2020 and may increase after consummation.

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.