How to Get Out of Student Loans

Learn how to get out of student loan legally and make loans cheaper with loan repayment options and loan forgiveness programs. Read different ways to discharge your loans in this article and for more information.

Updated by C Laltlanhlua on 21st June 2019

If you are struggling to make your monthly student loan payments, you are not alone. There are more than 44 million people who are in debt of student loans as of June 2019. Many borrowers are able to manage their repayments, while a huge chunk of them are struggling to even pay the bare minimum. There could be countless reasons why.

Regardless of the cause of your struggle, there are ways to relief, if not all, a huge part of your student loan burden. There are several steps you can take - from ways to make your loan cheaper by reducing the interest rates, to eligibility for the forgiveness of the entire outstanding loan amount. We will discuss ways to pay lesser and in a manageable amount or even pay nothing at all.

However, not everyone will be eligible for these programs. Your past repayments, your employment, and your current credit score will be the factor paying the major roles in defining whether you will be eligible or not.

List of Contents

Getting out of Student Loans

Getting out of student loans is never easy. Moreover, you have taken the loan and used the money. It would only be fair if you pay it back the way you promised that you would in your Master Promissory Note.

On the other hand, several situations are out of our hands. Your struggles with your loan payments may have never been your fault to start with. You may have had an accident that leads you to unemployment, you may have faced serious health issues that not only restricted you from working but dipped your financial situation because of heavy medical expenses, the school you enrolled in somehow failed to grant you your degree, or it may be due to several other inevitable circumstances.

If you have genuine reasons like the ones stated above, you need not worry. The federal direct loan provides several protections for borrowers who may fall into such tragic situations. Before we dive into all the available plans and programs of this protection, let us first look into ways of reducing the loan amount and/or monthly payments and managing multiple loans.

Change Repayment Plans

It may not seem much, but changing your payment plans can reduce your financial stress very effectively. For federal Loan borrowers, if your monthly payments are too high compared to your discretionary income, you can opt for one of the Income-Driven Repayment Plans.

If you need to pay off your loan faster, you may opt for the Standard Repayment Plan. You may also choose any of the other options to suit your financial needs. All you have to do is contact your respective loan servicer.

Depending upon the type of loan you have taken, your eligibility for a repayment plan will differ. The list below shows several repayment plans for federal student loans.

  • Standard Repayment Plan

  • Graduated Repayment Plan

  • Extended Repayment Plan

  • Revised Pay As You Earn Repayment  Plan (REPAYE)

  • Pay As You Earn Repayment Plan (PAYE)

  • Income-Based Repayment Plan (IBR)

  • Income-Contingent Repayment Plan (ICR)

  • Income-Sensitive Repayment Plan

For private student loans, the repayment plans vary widely from lenders to lenders. The majority of the top financial institutions offer flexible repayment plans. Kindly contact your lenders to know more about the options you have.

Loan Consolidation Programs

Consolidation is the process of combining multiple small loans into a single loan. All federal student loans can be consolidated under the Direct Consolidation Loan. The new interest rate of the consolidated Loan will be the weighted average of the combined interest of all the previous loans.

No fees - Consolidating federal loans does not require any fees.

One single Payment - It is very helpful for borrowers with multiple loan servicers. After consolidating your loans, you will have to make payments to only a single loan servicer instead of paying to multiple servicers for every month. This is one way of relieving your stress.

Decrease Monthly Payments - When you consolidate your loans, you may have a chance to increase your loan terms which will reduce your monthly payments. This will reduce the stress of needing to manage your payment but it is important to note that this will increase the overall amount of the loan.

Before consolidating your loans, always weight the proc with the cons as you may lose several benefits that come with your current loan if you consolidate them.

Loan Refinancing Programs

Refinancing is a process of revising and remodeling the existing loan agreement into a new agreement. The refinanced loans may have lower interest rates, change in loan terms, etc.. These changes in the agreement should ultimately reduce your financial stress.

Refinancing is done by private lenders only, the federal government does not have a refinancing program. The idea of refinancing stems from the fact that after you have made multiple eligible on-time repayments, your credit score would have increased. This change in your credit score might make you eligible for a better, lower interest rate compared to your previous rates, or any other changes that you may be eligible, which you previously did not.

In addition to lowering your interest rates, refinancing also allows you to consolidate loans. Multiple loans, a combination of private and federal loans, can be refinanced into one loan. If federal loans are refinanced, all the benefits like forgiveness, discharge, etc. of the loan will be nullified. Your federal loan will now be converted into a private loan.

Loan Forgiveness Programs

Forgiveness is the process through which borrowers are excepted from paying some or the entire amount of the loan they borrowed, provided that they are eligible under one of the programs. Federal Student Loans offer two forgiveness programs, each program having their individual eligibility criteria.

If you are eligible for any one of the following programs, or you believe you may be eligible, you must contact your loan servicer. They will help you proceed further to have your loans forgiven.

Public Service Loan Forgiveness - This program is for eligible borrowers who are employed to eligible employers, as mentioned in the federal student aid website.

Teacher Loan Forgiveness - This program is for eligible borrowers who are employed at eligible schools as mentioned in the federal student aid website.

For private student loans, forgiveness is only offered by a few lenders under strict criteria. Kindly contact your lender or servicer to know more about it.

Loan Discharge Programs

Discharge is the process through which borrowers are excepted from paying some or the entire amount of the loan they borrowed, provided that they are eligible under one of the programs. Federal Student Loans offer several discharge programs, each program having their individual eligibility criteria.

If you are eligible for any one of the following programs, or you believe you may be eligible, you must contact your loan servicer. They will help you proceed further to have your loans discharged.

  • Total and Permanent Disability Discharge

  • Death Discharge

  • Closed School Discharge

  • False Certification Discharge

  • Unpaid Refund Discharge

Forgiveness is an exemption made due to the kind of employment borrowers are in, while Discharge is an exemption made due to other circumstances.

Bankruptcy Discharge Program

In times of dire situation where borrowers hit the ultimate bottom in finances, they may get an attorney to file for an adversary proceeding in bankruptcy court. You would be required to file chapter 7 and 13  bankruptcy and prove that your loans will impose hardships on you and people who depend on you.

Your loan lender is allowed to challenge your claim in court. The bankruptcy court will investigate your case to see if your claims are true. Your previous effort to repay your loan will also play a huge role in the investigation.

The ultimate decision of the court will vary from case to case. The discharge may be done partial or for the full amount of the remaining of the loan. Your claim may receive change in loan terms alone or it may even be rejected.


Student Loans play a huge part of the education system in America. It has done a great deal of a job in aiding students who are in need of financial help. Many students have received their education because of student loans alone, which they might not have.

However true it may be, that student loan is a life-saver, it also imposes great risks on the future of many borrowers. We have seen many cases where the livelihood of borrowers are completely ruined because they have taken student loans in the past which they cannot afford to repay.

As we have discussed, getting out of student loan is not impossible but not always easy. So, make your decisions carefully before you request for student loans. Do not jump into financial aids without familiarizing yourself with every detail of the terms and conditions in order to avoid the unwanted and unnecessary financial situation. Only take the amount of loan that will be needed, and use your loans only in places they are meant to be used, that is for your education.


  What happens to student loans when you die?

According to the U.S.Department of Education in the case of any borrowed a federal student loan gets died then the loan amount is automatically canceled and the debt is being discharged by the government. But not in the case of private student loans they don't offer the same liability protection as per federal government does.

  Can student loans be paid off early?

yes, you can pay more than you are required a monthly payment there won't be any charge if you pay more. If you are very much interested in paying off the loan debt as soon as possible.

Work in advance and pay more than your usual monthly payment by paying off the loan as soon will help you in the long run as generally the interest gradually makes hard and take more than what was spoken when terms increase by this it can be avoided.

  Do your student loans get forgiven after 25 years?

Generally, it's eligible for the borrowers who have been qualified for student loan forgiveness on their balance after a period of 20 years through a specific income-driven repayment plan such as Pay As You Earn (PAYE). Where anyone who is eligible for a federal student loan might be qualified for the income-based repayment plan which also offers forgiveness after a certain period.

  Can you negotiate a payoff on a student loan?

The money is generated through the interest and fees that have been allocated further their perspective of getting their money that is you are setting your debts which is a huge change for them as you are paying off.

It will further make things easier by contacting your lender and on the instance without any hesitation if you feel bad or thing bad to call him then there is no possibility to negotiate your settlement. the best thing to do is pay off them with the balance as a full. it might not seem like a good move but trust that it will pay you off in the long run.

  How do I prove undue hardship for student loans?

The proof generally lies on you as you need to prove that undue hardship. To convenience the court and make it as a success to discharge of your loans with the required records and documents to show that you are unable to maintain it on a minimal standard of living while doing it.

  Can a lawyer help with student loans?

A lawyer will be helpful if you are doing any of the activity like dealing default or filling for bankruptcy, looking to apply for a disability discharge this all can be done with the help of a student lawyer.

Student loan lawyers can help with these like subtleties of private student loan any loan differences between them can be used here.

  What is considered an undue hardship?

Undue hardship requires a significant expense on consideration of a number of factors which can be of the cost of accommodation associated with the size, resource and the operation of the employer's

It is determined o various factors facility to make the accommodation of larger entity here the structure and other resources are also considered the financial management too.

  Can I get a student loan after filing chapter 7?

Bankruptcy might be qualified for certain student loans it will be a hefty process to get approved for other loans. Its mainly provided to the federal student loans under the Stafford and Perkins loans and provided only on the based on need and not on the creditworthiness. Filling a chapter Chapter 7 or 13 bankruptcy will not get anywhere between the federal loans.

  Do you inherit your spouse's student loan debt?

It is for certain cases where your spouse can also be responsible for student loans. All federal loans and private loans offer a death discharge once the borrower dies while some private lenders may not discharge the loan.

  How long does it take for a student loan to be wiped?

It takes around 30 years to wipe all of the remaining unpaid debts. You should either complete owing to the loan or either when you have successfully cleared the debt within the 30 years whichever comes first.