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3 Ways to Make Your Student Loan Payments More Affordable

By Maurie Backman – Updated Feb 6, 2020 at 11:50AM

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Struggling to pay back your loans? These tips will help.

Many people take out student loans for college, only to find it extremely difficult to keep up with their debt payments. But falling behind is not a great option. If you fail to make your loan payments, you risk damaging your credit. And in more extreme cases, you could also wind up having your wages garnished.

A better bet? Take steps to make those loan payments easier to manage. Here’s how.

Pencil-drawn stacks of 100-dollar bills floating in man's open palm.

Image source: Getty Images

1. Apply for an income-driven repayment plan

If you took out federal loans for college, getting on an income-driven repayment plan could make that debt more affordable. As the name implies, these plans use your income to determine what your monthly loan payments should be. The only downside with these repayment plans is that you may end up extending the life of your loan, thereby dragging out that debt for longer. But you’ll ease the pain on a month-to-month basis.

Now if you took out private loans for college, you should know that official income-driven repayment plans are reserved for federal borrowers only. But that doesn’t mean you can’t contact your lender and ask for a custom plan. Remember, your lender wants to get repaid, so if you make it clear that you can’t swing your current payments, but can manage a lower amount, your lender might agree to negotiate.

2. Refinance your loans

The interest rates attached to your loans could be one reason they are so expensive. The higher it is, the more money you’ll pay each month. If you took out federal loans, you probably snagged a reasonable rate on your student debt, because that interest is regulated and capped at preset amounts. But if you borrowed privately for college, you may be stuck with an exorbitant interest rate -- and a variable one at that, which means that your monthly payments may be higher today than they were when you first started making them.

The solution? Refinance your student debt if you’re dealing with private loans. When you refinance, you trade an existing loan for a new one, and if that new loan has a much lower interest rate, you stand to slash your monthly payments. The great thing about refinancing student debt is that you’re able to do so at no cost (when you refinance a mortgage, by contrast, there are different fees involved that eat away at your savings), so it pays to see what rate you qualify for. This especially holds true if your credit is excellent. 

3. Get better about budgeting

It’s hard to pay for any expense that eats up a lot of your income, so if you’re struggling with your student debt, it’s time to set up a budget. Budgeting won’t lower your monthly loan payments, but it will help you better manage your money so you don’t risk falling behind on any of your obligations, student loans included. 

To set up a budget, list your recurring monthly expenses, and then factor in once-a-year expenses that you need to account for during the year (like your professional license renewal, which may only come due once annually but at a multi-hundred-dollar cost). From there, you can identify ways to cut corners in discretionary spending categories, like dining and entertainment, to ensure that you’re able to keep up with your debt. 

You can’t afford to fall behind on your student loans. If your payments are straining your limited resources, it’s time to take action -- before you fall behind and damage your finances irreparably. 


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