Phoenix Bankruptcy Law News

What to Do if You Can't Pay Your Student Loans

Student loans have become an albatross for many recent graduates. They can't pay off their student loans, but they can't have their student loan debts discharged in bankruptcy either.

So what can you do if you can't make your student loan payments? Fortunately, there are a few tools at your disposal.


In some circumstances, you can receive a deferment of your student loan payments, meaning you'll be able to put your payments on hold for a period of time. Generally, you must show that you're facing extreme economic hardship, have a disability, can't find a job, or are returning to school.

Depending on the terms of your loan, you may be able to defer payments on the principal and stop interest from accruing on the unpaid balance. Other types of loans will let you defer payments on the principal, but allow interest to continue to accrue during the deferment. Take a look at the terms of your loan to determine whether deferment is an option for you.


A loan forbearance is usually a bit easier to obtain than a deferment. That's because forbearances aren't contingent on the type of loan you have and aren't covered by the laws and regulations that govern deferment. So if you're having trouble getting your loan deferred, you may want to look into obtaining a forbearance. A student loan forbearance is similar to deferment, in that it allows you to stop making payments for a period of time. However, during a forbearance period, the interest on the loan continues to accrue.


In extreme circumstances, you may be able to cancel your student loan. If you're involved in an accident that leaves you disabled and unable to work for a significant amount of time, you may be able to have your loan canceled. If you join the armed forces or take up public service work, you may be able to have your loan canceled as well. Also, if you left school before you finished your degree, you may be able to cancel your loan up to the amount you should've received as a refund.

To cancel or defer your loan, you should contact your lender or the Department of Education's Debt Collection Services Office. However, before making a decision, you should consult with an attorney to make sure you're on the right path. Good luck!

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