Question: I am attached but I want to be free. I have $80,000 in student loan debt. I work 60 hours a week in 12 hour shifts just to make ends meet. I live check for check because I am the sole breadwinner between my husband and me. We have no children. It seems the only way to get me out of debt is to get a second full-time job during the day. What should I do?
To respond: There’s no doubt that it’s frustrating to work as hard as you do and barely make ends meet. The good news: there may be ways to ease your debt load. If you have private student loans, ask your lender if they would change the term of your loan to help you pay the payments, says Andrew Pentis, student debt and higher education expert at Student Loan Hero. “Reducing your monthly payments in this way would give you some breathing room and give you time to establish a longer-term approach,” says Pentis. And if the interest rates on your private student loans are high, you might want to consider refinancing (see the lowest rates you can qualify for here) at a lower rate, which could lower payments.
If you have federal student loans, think twice before refinancing, as this will strip you of federal protections such as income-based repayment plans and loan forgiveness. Instead, “enrolling in an income-driven repayment plan might be your best option. It ties your monthly bill amount to a portion of your income and extends the period over which you pay off debt. This is the best option for getting a more affordable payment, but it could lead to paying more interest over time,” says Anna Helhoski, student loan expert at NerdWallet. Under an income-based repayment plan, if your income is extremely low, your payment could even be $0 and still count as a payment. And income-driven repayment plans cancel remaining debt after 20 to 25 years, depending on the specific plan. “Be sure to recertify your income amount each year or whenever it changes,” says Helhoski. This will ensure that you pay an amount of money each month that is within your budget.
You may also be able to get loan forgiveness if you have federal loans. The Public Service Loan Forgiveness (PSLF) is available to many full-time workers who are employed by government or non-profit organizations, who meet these qualifications. For those who are eligible, their remaining student loan balance will be forgiven after making approximately 10 years of monthly payments under one of the eligible repayment plans.
Employer help for student loans
Some employers also offer help to those who are burdened with student loans, repaying their employees’ student loans by offering things like cash or payment matching programs.
Process your payments
No matter what type of loan you have, the most important thing you can do right now is stay on track by making monthly payments to avoid defaulting on your loans, which can hurt your credit and lead to other consequences such as wage garnishment.
You also need to look at your expenses and income, say the pros. “You can only budget and cut costs up to a point, so a lot of your attention should be focused on ways to increase your revenue,” says Pentis. Need help with these things? Certified Financial Planner Lisa Weil says, “A wonderful book for reviewing and realigning your financial priorities and helping you get back on the road is your money or your life by Vicki Robin and Joe Dominguez.
Something else to consider: can your husband find a job to help bring more income into the household? In fact, getting him to find a job, if he can, would be the first place to start, says certified financial planner Cait Howerton. “I recommend that he apply for unemployment to temporarily bring money to the household if it is temporary unemployment,” he says. If your husband is permanently disabled and you will still be the primary breadwinner, Howerton advises getting him to apply for federal disability income.
“You may also have to consider bankruptcy if those loan repayments are completely unmanageable,” Howerton says. Just note that it is difficult to obtain student loan discharge in the event of bankruptcy.
Questions edited for brevity and clarity