If you find yourself unable to effectively manage your student loan payments, don’t panic. First of all, you are not alone. Millions of people struggle with their student loan debt, and the good news is that many lenders have stepped up to provide practical, affordable, sensible solutions to the problem.

Can I switch into a more manageable student loan?

The answer is yes, and there are more options than ever before for doing this – which is technically called a refinance. The key is to find a lender who can offer a new loan that will pay off your existing one but give you a new, lower monthly payment. What impacts the amount of the monthly payment the most is two factors, the length of the repayment period on the loan, and the interest rate.

If you refinance student loans to extend the life of the loan – say from a 15-year loan, for instance, to a 20-year loan – but keep the same interest rate, that reduces your monthly payments. You will, however, wind up paying more in interest because you will be repaying the loan for a longer time. If you refinance to a loan that lets you lower the interest rate but keep same repayment period however, you can substantially reduce how much you pay over the life of that loan.

What are my federal student loan options?

With federal student loans, there are a variety of options to help you manage your payments, including those that let you pay based upon your current income; those that postpone payments of principal and interest; and those that involve what is called forbearance. Forbearance lets you stop making monthly payments for up a year, without being penalized.

Each of these strategies may just delay the pain, however. While they are designed to make it easier to manage your payments now, you will likely still have to eventually pay up in order to fulfill your borrower obligations. You also need to prove that you are eligible for these kinds of programs, which may require you to demonstrate that you are experiencing a unique financial hardship.

What about student loan consolidation?

Do you have more than one student loan? In that case you may be able to consolidate all of your different student loans, which means that you combine all of them into one single new loan with one monthly payment. There are programs for consolidating federal loans, and there are also private lenders who will let you refinance or consolidate a federal loan

If you have a private loan or loans, you can also refinance or consolidate those with a new and different private lender. The third scenario is when you have a mixture of both federal and private loans. Thanks to recent changes in federal rules, you can now also consolidate a combination of private and federal student loans into a single private loan with just one easy-to-manage monthly payment.

The Bottom Line

Usually one of these options – refinancing or consolidation – is the quickest and easiest way to deal with a student loan or student loans that you are having difficulty affording. The key is to shop for a loan that offers a lower payment but also has user-friendly terms, conditions, and a reasonable payback period.

To qualify for the most attractive loans you’ll want to have healthy credit and a decent credit history, too, so take whatever steps you can to improve your credit score prior to loan application. Of course if you do a student loan consolidation or refinance that takes the pressure off of your financial life and makes student loan repayment easier, that should automatically help boost your overall credit profile.


Please note that the information provided on this website is provided on a general basis and may not apply to your own specific individual needs, goals, financial position, experience, etc. LendKey does not guarantee that the information provided on any third-party website that LendKey offers a hyperlink to is up-to-date and accurate at the time you access it, and LendKey does not guarantee that information provided on such external websites (and this website) is best-suited for your particular circumstances. Therefore, you may want to consult with an expert (financial adviser, school financial aid office, etc.) before making financial decisions that may be discussed on this website.