How to Reduce a Student Loan Repayment
It is not unusual to have difficulty paying back student loans, especially if your monthly payments are high compared to your other monthly bills. Before formally reducing the payment, go over your budget and see if there are other places you can make cuts. If you are spending a lot on eating out, cable television or cellphones, for example, cut these back before going after your student loan payments. However, if you are having trouble just paying your rent and utilities with your student loan payment, there are ways to reduce the payment.
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Apply for a deferment if you have entered a period of your life when paying back the loans is not possible. This may occur due to a job loss, military service or re-enrolling in school. A deferment relieves you from paying the loan for six months or more until you are back on your feet. If your loan is through the U.S. government, apply for a deferment through the Federal Direct Loan website; if it's through a bank, ask the bank how to apply.
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File for the income-contingent plan that fits into your current income. Most banks and the U.S. government can adjust your payments based on your income. Although the term of your loan may be longer and you will pay more interest over time, you will not default on your loan and you will likely have a lower monthly payment. For a federal loan, file the plan at the Federal Student Aid website.
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Apply for a forbearance to either stop making payments for a limited amount of time or to reduce your payments for a limited amount of time due to an unspecified hardship. You will get relief from the payments but interest on the overall debt still accrues and will be added to your balance. You can get a forbearance for up to three years.
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Consolidate your loans. If you have more than one student loan, have them consolidated through the Federal Direct Student Loan program. This will put all of your loans under one payment and reduce your overall payment.
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Extend your repayment of your loans. An extended plan lasts for up to 25 years and allows you to make smaller payments. Ask your lender about this plan or contact the Federal Direct Student Loan program online or by phone.
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