If you're like many Americans who attended college, you're likely dealing with at least some student loan debt. Maybe high student loan payments surprised you after graduation, or maybe you're stuck in a low-paying job when you thought you'd surely be in the corner office by now.
Either way, you're certainly not alone if you're struggling with student loan debt. The nonprofit American Student Assistance reports two in five student loan borrowers are late on their student loan bills within the first five years of entering repayment.
Even if you haven't been late in making your student loan payments, you may be feeling the financial crush. High payments on your student loans can quickly take over your budget and, seemingly, your life!
Here are four ways to avoid being crushed by student loan debt:
1. Change your repayment plan.
When you first enter into repayment on your student loans, you'll automatically be signed up for the standard repayment plan. This plan will set you up to pay off your student loans in 10 years maximum, with a minimum monthly payment of $50.
The standard repayment plan is great because it gets you out of debt quickly. Plus, you end up paying less interest with this repayment plan than others. However, the standard plan can also load you up with high payments right from the start.
If you can't fit standard student loan payments into your budget, look into alternative repayment plans. Here are your options:
--Graduated Repayment: If you can't handle high student loan payments now but expect to be able to down the road, this is a good option. This repayment plan starts with lower payments that are increased usually every two years. You'll still pay your loans off in 10 years, but you can make lower payments now.
--Extended Repayment: Extended repayment plans give you up to 25 years to pay off your loans with a fixed or graduated monthly payment. You'll pay more interest with this plan, but it's a simple way to reduce your monthly payments.
--Income-Based, Income-Contingent, Income-Sensitive and Pay as You Earn: As you might guess, each of these plans bases your student loan payments on your actual income. This is especially helpful if you expect your income to fluctuate through the next few years. Each plan applies to different situations and is figured on a different formula, but they follow the same basic concept.
2. Consider consolidation.
If you're like most students, you likely have a handful of student loans. They may be from different lenders or from the same lender to pay for different years. Either way, making payments on five or 10 different loans can be confusing - and expensive!
Consolidation often results in an overall lower student loan payment and locks you into a fixed, predictable interest rate. Consolidation loans are also eligible for many of the above alternative repayment plans.
You'll want to look into student loan consolidation more before you make this choice, since it's not always a good deal. But it can be a good option for lowering your payments, often without extending your repayment time.
3. Apply for deferment or forbearance.
If you're really struggling financially for a short period of time, apply for deferment or forbearance on your student loans. Both options allow you to stop making student loan payments for a set period of time. Deferment is the better option because your deferred loan won't accrue interest, but it's often easier to qualify for forbearance.
If you lose a job or run into other financial difficulties, talk to your student loan servicer about deferment and forbearance options that might be available for you.
4. Look into forgiveness and cancellation.
In some cases, you may be able to have your student loans forgiven or discharged. For instance, public servants and teachers are often eligible for loan forgiveness after a certain number of years on the job. Those who are unemployable as a result of a disability can also likely have their student loans discharged.
If You Have Private Student Loans
For the most part, these student loan repayment options apply only to federal student loans. If you also took out private student loans, these repayment options may not apply.
Your best option if you're struggling to make private student loan payments is to talk with your lender as soon as you start struggling. Most lenders will work with you, as long as you're upfront about your financial situation before you miss loan payments.
Abby Hayes is a freelance blogger and journalist who writes for personal finance blog The Dough Roller and contributes to Dough Roller's weekly newsletter.