Question: I’m strapped but 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 have been living check to check because I’m the sole earner between my husband and me. We have no children. It seems like the only way I can get out of debt is to get a second full-time job during the day. What should I do?
Answer: There’s no doubt it’s frustrating to work as hard as you do and still barely make ends meet. The good news: There may be ways to alleviate the burden of your debt. If you have private student loans, talk to your lender about whether they would modify your loan term to help you afford payments, says Andrew Pentis, student debt and higher education expert at Student Loan Hero. “Lowering your monthly payments in this way would give you some breathing room and buy you some time to establish a longer-term approach,” says Pentis. And if the interest rates on your private student loans are high, you may want to consider refinancing (see the lowest rates you can qualify for here) to a lower rate, which could lower payments.
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If you have federal student loans, think twice before refinancing, as it will strip you of federal protections like income-driven repayment plans and loan forgiveness. Instead, “enrolling in an income-driven repayment plan could be your best option. It ties your monthly bill amount to a portion of your income and extends the period of time you repay the debt. It’s the best option to get a more affordable payment, but could lead to paying more in interest over time,” says Anna Helhoski, student loan expert at NerdWallet. Under an income-driven 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 20-25 years, depending on the specific plan. “Make sure to re-certify your income amount annually or whenever it changes,” says Helhoski. This will ensure you’re paying an amount of money each month that works within your budget.
You may also be able to get loan forgiveness if you have federal loans. Public Service Loan Forgiveness (PSLF) is offered to many full-time workers who are employed by the government or non-profit organizations, who meet these qualifications. For those who qualify, their remaining student loan balance will be forgiven after they make roughly 10 years of monthly payments under one of the qualifying repayment plans.
Employer help with student loans
Some employers also offer help to those burdened with student loans, whereby they pay off their employees’ student loans by offering them things like straight-up cash or payment match programs.
Dealing with your payments
Whichever type of loans you have, the most important thing you can do right now is to stay on track by making monthly payments to avoid defaulting on your loans, which can hurt your credit and lead to other consequences like wage garnishment.
You also need to take a look at your expenses and your income, pros say. “You can only budget and trim costs to a point, so much of your attention should be focused on ways to increase your income,” says Pentis. Need help with these things? Certified financial planner Lisa Weil says, “A wonderful book for examining and realigning your financial priorities and to help put you back in the driver’s seat is Your Money or Your Life by Vicki Robin and Joe Dominguez.”
Something else to consider: Can your husband get a job to help bring more income into the household? In fact, having him get 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 some cash into the household if this is a temporary stint of unemployment,” he says. If your husband is permanently disabled and you’re always going to be the primary earner, Howerton advises having him apply for federal disability income.
“You may also have to consider bankruptcy if these loan payments are completely unmanageable,” says Howerton. Just note that getting student loans discharged in bankruptcy is difficult.
Questions edited for brevity and clarity