You have options before you miss a payment
If you cannot afford your student loan payment this month, you do not have to skip it and damage your credit. Federal loans and many private loans offer ways to reduce or pause your payment without defaulting. The fastest move is to contact your loan servicer directly — they manage your account and handle payment changes. You can reach them through your loan documents or by logging into your account online.
The specific options depend on whether your loans are federal or private, and how long you have known you would struggle. If you are already behind, the path is different than if you see the problem coming. Either way, acting before you miss a payment keeps you out of default and protects your credit score.
Key Takeaways
- Federal loans offer income-driven repayment plans that can lower your payment to as little as $0 per month based on what you actually earn.
- Deferment and forbearance pause your payments temporarily, though interest may still accrue on unsubsidized loans.
- Your loan servicer is the first call — they can walk you through options and process changes without you having to contact the Department of Education.
- Private loans have fewer built-in protections, but many lenders will work with you on a temporary payment reduction or pause if you contact them before missing a payment.
- Missing a payment triggers late fees and credit damage within 30 days, so the window to act is narrow.
Income-driven repayment plans for federal loans
If you have federal student loans, an income-driven repayment plan recalculates your monthly payment based on your current income rather than the loan balance. There are four plans: SAVE (Saving on a Valuable Education), PAYE (Pay As You Earn), REPAYE (Revised Pay As You Earn), and IBR (Income-Based Repayment). SAVE is the newest and usually results in the lowest payment.
Under SAVE, if you earn less than 225% of the federal poverty line for your household size, your payment is $0. Even above that threshold, your payment is capped at 5% of your discretionary income — roughly half the standard 10% on older plans. You will need to provide recent income documentation, usually your tax return or a pay stub. The servicer will verify this information.
Switching to an income-driven plan takes one to two weeks once you submit the request. You can start the process online through your servicer's website or by phone. If you are already behind, moving to a new plan does not erase the missed payments, but it stops the clock on late fees once the new plan takes effect.
Deferment and forbearance: pausing payments temporarily
Deferment and forbearance both pause your monthly payment for a set period — usually three to six months, sometimes longer. The difference matters: on subsidized federal loans, the government pays the interest during deferment, so your balance does not grow. During forbearance, interest accrues on all loan types, meaning you owe more when payments restart.
You may have access to for deferment if you are in school at least half-time, unemployed, experiencing economic hardship, or in certain military service situations. Forbearance is broader — you can request it for almost any financial difficulty, but the servicer has discretion to approve or deny it. Both require you to contact your servicer and provide documentation of your situation.
Forbearance is faster to process than deferment (often approved within days), but deferment is better if you have unsubsidized loans because interest does not accrue. If you are unsure which applies to you, your servicer can walk through the requirements. The pause buys you time, but it does not forgive the debt — you will resume payments when the period ends, and the balance may be higher.
What to do if you have private student loans
Private loans do not have the same safety net as federal loans. There is no income-driven repayment, no deferment, and no forbearance in the legal sense. However, many private lenders will negotiate a temporary solution if you contact them before you miss a payment.
Call your lender and explain your situation honestly. Some will offer a short-term payment reduction (paying 50% of your normal amount for two or three months), a brief pause, or a switch to interest-only payments. A few lenders have hardship programs similar to federal options, though the terms vary widely. The key is calling before the payment is due — after you miss it, the lender has less incentive to work with you.
If your private lender will not negotiate and you cannot pay, you will enter default faster than with federal loans. Private loan default can trigger wage garnishment and lawsuits within months. This is why acting early matters: a lender is more likely to help you avoid default than to chase you through the courts afterward.
The timeline and cost of missing a payment
A payment is considered late the day after it is due. Here is what happens as time passes: at 30 days late, the missed payment appears on your credit report and your credit score drops. At 90 days late, the lender may report the loan as in default. At 120 days late, federal loans enter official default and the entire remaining balance becomes due when ready — the lender can then pursue wage garnishment or tax refund offset.
Late fees compound the problem. Federal loans do not charge late fees, but private loans often charge 5% to 10% of the missed payment. If you miss a $300 payment, you might owe $315 to $330 just in fees. These fees are added to your balance, making the next payment even harder to afford.
The credit damage is the longest-lasting cost. A missed payment stays on your credit report for seven years, affecting your ability to borrow for a car, a home, or even to rent an apartment. This is why the options above — income-driven plans, deferment, forbearance, or lender negotiation — are worth pursuing even if they feel complicated.
How to contact your servicer and what to ask for
Your loan servicer's contact information is on your monthly statement or in your online account. For federal loans, you can also find it on studentaid.gov by logging into your account. Call or log in online and tell them you are having trouble affording your payment. Be specific: say whether you lost income, had an unexpected expense, or are facing a longer-term hardship.
Ask them to walk you through the options available for your loan type. If you have federal loans, ask about income-driven repayment first — it is the most flexible. If that does not lower your payment enough, ask about deferment or forbearance. If you have private loans, ask directly whether they have a hardship program or will negotiate a temporary reduction.
The servicer will likely ask for documentation: recent pay stubs, tax returns, or a letter explaining your situation. Have these ready or be prepared to upload them. Once you submit, the servicer will tell you the timeline for approval. Do not wait for approval to stop worrying — the process is underway, and you are no longer at risk of default as long as you are working with them in good faith.
What happens if you are already behind
If you have already missed one or more payments, the situation is more urgent but still recoverable. Contact your servicer when ready. For federal loans, you can request a loan rehabilitation program: make nine on-time payments over ten months, and the default is removed from your credit report. The payment is calculated based on your income, so it may be lower than your original amount.
Rehabilitation does not erase the missed payments from your history, but it stops the default status and removes the threat of wage garnishment. After you complete the nine payments, your loan returns to normal status and you can switch to an income-driven plan if you need to.
For private loans, contact the lender and ask about catching up. Some will allow you to add the missed amount to future payments over a few months. Others will demand the full amount when ready. The longer you wait, the fewer options you have, so call as soon as you realize you are behind.
Frequently Asked Questions
Will switching to an income-driven plan hurt my credit?
No. Changing your repayment plan is not a credit event. Your credit score may actually improve because you will be making on-time payments instead of missing them. The servicer reports the plan change to credit bureaus, but it does not lower your score.
What if my income is zero or very low?
Under SAVE and other income-driven plans, if your income is below the poverty line, your payment is $0. You still must recertify your income each year, but you will not owe anything that year. Interest still accrues on unsubsidized loans, but you are not in default and your credit is protected.
Can I get my loan forgiven if I cannot afford it?
Forgiveness programs exist for federal loans — Public Service Loan Forgiveness for government workers, Teacher Loan Forgiveness for teachers, and income-driven plan forgiveness after 20 to 25 years of payments. These are not automatic; you must meet specific requirements and explore. They are not a solution for this month's payment, but they may matter for your long-term plan.
What if my servicer is not helpful?
If your servicer denies your request or is unresponsive, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) or your state's attorney general. For federal loans, you can also contact the Federal Student Aid ombudsman. These agencies investigate complaints and can pressure servicers to reconsider.
Do I have to choose one option, or can I combine them?
You can combine some options. For example, you can switch to an income-driven plan and then request forbearance if you face a temporary crisis on top of low income. However, you cannot be in deferment and forbearance at the same time. Your servicer will advise on what combinations make sense for your situation.