What to Do If You Can’t Afford to Resume Your Student Loan Payments
Millions of Americans are once again facing the pressure of student loan payments as the US Department of Education resumes collections on federal student loans in default. Although the general pandemic-related student loan payment suspension ended some time ago, collections on defaulted loans remained paused until recently. As of May 5, 2025, borrowers in default are once again subject to collections actions, such as wage garnishment and tax refund offsets.
This marks a critical moment for many who are still financially strained post-pandemic and are unsure how to afford their monthly payments. If you're one of the many borrowers who can't afford student loan payments, here are the steps you can take.
Contact Your Loan Servicer Immediately
Don’t wait for a missed payment to take action. Contacting your loan servicer early gives you access to more options and helps prevent the situation from escalating. Servicers can help you determine which repayment plans, relief programs, or default recovery steps you qualify for.
Look Into Income-Driven Repayment Plans
One of the first options to explore is enrolling in an income-driven repayment (IDR) plan. These federal programs set your monthly payment based on your income and family size, sometimes as low as $0 per month. Available plans include Income-Based Repayment, Pay As You Earn, and Income-Contingent Repayment, among others. Signing up for an IDR plan can not only reduce your payment burden but also help you avoid default and keep your loans in good standing.
Apply for Temporary Relief: Deferment or Forbearance
If your financial hardship is short-term — due to job loss, medical expenses, or another unexpected event — you may qualify for deferment or forbearance. These options can pause or reduce your payments temporarily. Be aware, however, that interest often continues to accrue, so this should be a temporary solution rather than a long-term strategy.
Take Advantage of Fresh Start (If You’re in Default)
Borrowers who were in default prior to the payment pause may still be eligible for the Department of Education’s Fresh Start program, which offers a one-time opportunity to get out of default and back in good standing. This initiative is part of a broader effort to help borrowers succeed in repayment without the burden of collections.
Consider Getting Employer Support or Financial Counseling Services
Some employers offer student loan repayment assistance as a benefit, so it’s worth checking with your HR department. You can also consult a nonprofit credit counselor, who can help you create a budget and manage your loan repayment strategy.
Navigating student loan repayment can be stressful, especially when your budget is already tight. But federal relief options, proactive communication, and free resources can make a significant difference. Taking action now can help you avoid default, protect your credit, and regain control over your financial future.
Navigate Your Student Loan Payment Options With On Point
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Our Education Services and Career Services teams provide a range of supportive resources designed to help On Point students and graduates find the right college or university, training program, job, and “life” things in between. Join us to get comprehensive assistance with achieving academic, professional, and personal success. Contact us today to learn how!
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