5 Essential Strategies When You’re Broke and Can’t Pay Your Student Loans

Broke and can't pay student loans

Every time you check your bank account balance, you feel a pang of anxiety. You think, “Do I have enough to get by this month?” You might even feel like you can’t pay your student loans. It’s a tough place to be, especially when dealing with the burden of student loan debt.

How can you pay back student loans when you can barely pay your bills? It’s not easy, but here are a few things you can do to pay off debt on a limited income.

1. Be a cost-cutting machine

When you’re broke and paying back student loans, you need to evaluate each of your expenses. Ask yourself:

  • Do I need this?
  • Can I get this cheaper from somewhere else?
  • What value does this add to my life?

For basic needs, like rent, food, and transportation, look for ways to lower costs, such as by:

  • Getting a roommate
  • Renting out your apartment on Airbnb
  • Downsizing to a cheaper home
  • Finding ways to lower food costs
  • Negotiating lower payments for your bills
  • Going to local schools and community clinics for things like haircuts and dental care
  • Selling your car
  • Shopping for cheaper insurance
  • Walking or biking where possible

Comb through all of your expenses to see where you can cut back. It’s not that you are cutting these things out forever — it’s just a temporary measure until your situation improves.

Cut out most of your “wants,” but not all of them. Keep one thing for yourself. This can help you feel like you haven’t lost everything. For me, it was Netflix.

Being broke and paying off debt isn’t about never having fun — it’s more about being creative with your resources. Remember, you can still check out free books from the library, go to free concerts, visit museums during free hours, and go to art walks.

Cutting back on your spending is the first thing you can do to pay back student loans when you have little to no resources. But there is another side to this equation that can help you even more than cutting expenses.

2. Find ways to earn more money

Cutting back is a great way to do something today and see results. But when you’re broke, cutting back often isn’t a choice, it’s a necessary lifestyle. Luckily, there is another way to improve your situation so that you can continue to pay off debt: Earn more money.

A few years ago, when I was broke and paying off debt, I felt inspired by earning more. It was good for my finances and my confidence and helped me stay on track with my debt repayment goals.

Earning more money requires you to embrace a different mindset than cutting back. Instead of being a cost-cutting machine, start thinking of yourself as the boss of your own life. You are a business owner. How can you make and earn more money?

There are countless ways to bring in a little bit of extra income, such as by:

  • Selling your old stuff, like CDs and books
  • Freelancing as a coach, consultant, tutor, or writer
  • Being a background actor in film and television
  • Adjusting your tax withholding so instead of getting a refund, you earn more per paycheck
  • Using a cash back credit card and paying it back in full each month
  • Opening a new bank account for the cash bonus
  • Picking up a second job
  • Working as an Uber or Lyft driver
  • Becoming a virtual assistant

Keep in mind that these are just some ideas. The ways you can earn extra cash are only limited by your imagination.

3. Adjust your loan repayment plan

When you’re broke and trying to pay back student loans, everything seems like a struggle. To make things a little easier, consider adjusting your repayment plan.

The most important thing to remember is to stay in touch with your lender. If you are having trouble making payments, contact your lender right away. If you can’t pay your student loans and neglect to contact your lender or take action, your loans could end up in default, which has serious consequences.

4. Try something unconventional

If you want to pay back your student loans but have a limited income, you may want to try some unconventional strategies to get out of debt.

  • Sign up for Givling, an online game that helps pay back student loans. You don’t even have to play the game to get your loan paid off.
  • Find a job where your rent is covered, like a camp counselor, hostel worker, or in some cases, a teacher working abroad.

5. Don’t give up on your student loans

Debt can feel like a huge burden when you are struggling to pay basic expenses. Don’t give up hope. Practice gratitude for what you have, not what you don’t. Look for better-paying opportunities, say yes to overtime, and be open to new things coming your way.

Your self-worth is not your net worth, so don’t beat yourself up. Understand that student loan repayment is a marathon, not a sprint. You’ll get there in time.

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Published in Budgeting, Pay Off Student Loans, Student Loan Repayment

  • Heath Baker

    I don’t mean to be cynical, but this is the same advice that doesn’t give realistic advice. Gratitude doesn’t keep the lights on. Our country needs serious reform when it comes to student loans. I’m apart of a generation that used these loans as a means to better themselves and are suffering for it. I made the decision to take student loans. If I could take a third job, I would.