Managing student loans can feel overwhelming, but you’ve got options to ease the burden. Whether you're looking to pause payments temporarily or find ways to make them more affordable, there are strategies to help. From deferment to refinancing, here are ten practical ways to defer student loans and keep your finances in check.

Key Takeaways

• Deferment allows you to temporarily stop payments, often without accruing interest for certain loans.
• Forbearance can pause or reduce payments, but interest continues to grow.
• Income-driven repayment plans adjust your monthly payment based on your earnings.
• Public Service Loan Forgiveness can erase remaining balances for those in qualifying careers.
• Refinancing may lower your interest rate, making payments more manageable.

1. Deferment

When it comes to managing student loans, deferment is one of the most helpful tools out there. It’s essentially a pause button for your payments, giving you a break when life gets overwhelming. Whether you’re back in school, facing financial hardship, or dealing with other challenges, deferment can provide some much-needed breathing room.

How Deferment Works

Deferment temporarily suspends your loan payments, and if you have subsidized federal loans, the government even covers the interest during this period. That means your loan balance won’t grow while you’re in deferment. For unsubsidized loans, though, interest still accrues, so it’s something to keep in mind.

Pros of Deferment

• No Payments Required: You get a break from monthly payments, which can be a huge relief.
• Interest Coverage for Subsidized Loans: The government pays the interest, saving you money.
• Retain Federal Loan Benefits: You don’t lose access to programs like income-driven repayment plans later on.

Cons of Deferment

• Interest on Unsubsidized Loans: This can add up quickly and increase your total debt.
• Not a Long-Term Fix: It’s a temporary solution, so you’ll need a plan for when deferment ends.
• Eligibility Requirements: Not everyone qualifies, so you’ll need to check if you meet the criteria.

Deferment can be a financial lifeline, but it’s important to understand the terms and weigh the pros and cons. If you’re eligible, it’s a great way to ease financial pressure without falling behind on your loans.

Steps to Apply for Deferment

1. Check Your Eligibility: Make sure you meet the requirements, such as being enrolled in school at least half-time or facing economic hardship.
2. Contact Your Loan Servicer: They’ll guide you through the application process and let you know what documents you need.
3. Submit Your Application: Fill out the necessary forms and provide any required proof, like enrollment verification or income details.
4. Monitor Your Loan Status: Keep track of your deferment period and any interest that accrues.

Deferment isn’t a one-size-fits-all solution, but for those who qualify, it can make a world of difference. It’s worth exploring if you need a temporary break from your student loan payments.

2. Forbearance

Forbearance is like a temporary pause button for your student loans when life gets messy. Whether you’re dealing with a job loss, unexpected medical bills, or just need some breathing room, forbearance can help you avoid missing payments and falling into default. It’s a short-term solution designed to give you space to sort out your finances.

Why Consider Forbearance?

• Flexibility: You can stop or reduce your payments for up to 12 months at a time.
• Quick Application: Most loan servicers make it easy to apply with an online form or a phone call.
• Prevents Default: Even if you can’t pay, forbearance keeps your account in good standing.

While forbearance offers relief, interest keeps piling up on most loans, which can make your balance grow. This is something to keep in mind before relying on it too heavily.

Things to Watch Out For

1. Interest Accumulation: All loans, including subsidized ones, accrue interest during forbearance.
2. Not a Long-Term Fix: It’s a band-aid, not a cure. If you’re struggling long-term, consider other options like Income-Driven Repayment Plans.
3. Approval Isn’t Guaranteed: Your loan servicer has to approve your request, so it’s not automatic.

If you think forbearance might be the right move, start by contacting your loan servicer and submitting a General Forbearance Request. And remember, if you’re comparing deferment and forbearance, deferment might be a better option for loans that don’t accrue interest during the pause.

3. Income-Driven Repayment Plans

When your student loans feel like a mountain you just can’t climb, income-driven repayment (IDR) plans can be a lifeline. These plans adjust your monthly payment based on your income and family size, making them more manageable. If your paycheck is tight, this might be the break you need.

How Do IDR Plans Work?

1. Income-Based Payments: Your monthly payment is typically capped at a percentage of your discretionary income—usually 10-20%.
2. Annual Updates: You’ll need to recertify your income and family size every year to keep your payments accurate.
3. Forgiveness at the End: After 20-25 years of consistent payments, any remaining balance could be forgiven. Keep in mind, though, that forgiven amounts might be taxable.

Types of Income-Driven Repayment Plans

Here’s a quick rundown of the most common IDR options:

Plan Name	Payment Percentage	Repayment Term	Notes
Pay As You Earn (PAYE)	10%	20 years	Requires proof of financial hardship.
Income-Based Repayment (IBR)	10-15%	20-25 years	Terms vary depending on loan disbursement.
Income-Contingent Repayment	20%	25 years	Adjusts based on income and loan balance.

"Switching to an income-driven repayment plan can feel like a weight lifted, especially when you’re juggling other financial priorities."

Pros and Cons of IDR Plans

Pros:

• Payments scale with your income, offering flexibility.
• Helps avoid default by keeping payments affordable.
• Potential for loan forgiveness after the repayment term.

Cons:

• You may pay more in interest over the life of the loan.
• Forgiven balances might be taxed as income.
• Requires yearly documentation updates.

Income-driven repayment plans are especially helpful if your income varies or if you’re just starting out in your career. For borrowers considering options like the Income-Based Repayment Plan (IBR), it’s worth understanding how these plans can align with your financial goals. They’re not perfect, but they’re a solid option for many.

4. Public Service Loan Forgiveness

Public Service Loan Forgiveness (PSLF) is a game-changer for people working in government or nonprofit roles. The idea is simple but powerful: make 120 qualifying payments while working full-time in a public service job, and the remaining balance on your Direct Loans could be forgiven. That’s right—gone for good.

How It Works

Here’s a quick rundown of the essentials:

• Qualifying Employment: You need to work full-time for a government agency or a nonprofit organization. Not all nonprofits count, so double-check with your HR department.
• Eligible Loans: Only Direct Loans qualify for PSLF. If you’ve got other federal loans, you might need to consolidate them into a Direct Consolidation Loan first.
• Repayment Plan: Payments must be made under a qualifying repayment plan, like an income-driven repayment plan (IDR).
• 120 Payments: These don’t have to be consecutive, but they do need to be on time and for the full amount due.

Why It’s Worth It

Think about it: ten years of payments while building a career in public service, and your remaining loan balance gets wiped clean. That’s huge! Plus, refunds from the PSLF program, like the loan forgiveness itself, are not considered taxable income, which is a big bonus. Refunds from the PSLF program can make a massive difference in your financial future.

"If you’re already in public service or considering it, PSLF can be a golden opportunity to both give back and lighten your financial load."

Pro Tips for Success

1. Certify Early and Often: Submit the Employment Certification Form (ECF) annually and whenever you change jobs. This helps track your progress.
2. Stay Organized: Keep a file with all your loan documents, payment records, and ECF confirmations.
3. Double-Check Payments: Not all payments count. Make sure yours are qualified by checking with your loan servicer.

Common Pitfalls to Avoid

• Skipping Certification: Missing annual certification can lead to headaches later.
• Wrong Employer: Not all public service jobs qualify, so confirm before committing.
• Ineligible Loans: Private loans and some federal loans won’t count unless consolidated into Direct Loans.

Public Service Loan Forgiveness isn’t a quick fix, but for those in public service, it’s a light at the end of the student loan tunnel. If it fits your career path, it’s absolutely worth exploring!

5. Refinancing

Refinancing your student loans can feel like hitting the refresh button on your debt. It’s all about replacing your current loans with a new one, often at a lower interest rate. This could mean smaller monthly payments, or if you’re feeling ambitious, paying off your loans faster. The best part? You might save thousands over the life of the loan.

Why Consider Refinancing?

Here’s why refinancing might be worth a look:

• Lower Interest Rates: If your credit score has improved since you first borrowed, you could qualify for a better rate.
• Simplified Payments: Combine multiple loans into one, so you only have to worry about a single monthly payment.
• Flexible Terms: Choose a repayment period that fits your budget, whether you want to stretch it out or pay it off quickly.

The Trade-Offs

But refinancing isn’t for everyone. Here’s what you need to think about:

• You’ll lose federal loan benefits, like income-driven repayment plans and loan forgiveness programs.
• Private refinancing lenders usually require a strong credit score and steady income.
• Extending your loan term to lower monthly payments could mean paying more in interest over time.

Refinancing can be a smart move if you’re confident in your financial stability and don’t rely on federal loan perks. Just be sure to weigh the pros and cons carefully.

Quick Tips for Refinancing Success

1. Shop Around: Compare offers from multiple lenders to find the best rates and terms.
2. Check Your Credit: A higher credit score can unlock better deals.
3. Understand the Terms: Make sure you know if the interest rate is fixed or variable.

Refinancing can be a game-changer, but it’s not a one-size-fits-all solution. Take your time, crunch the numbers, and decide if it’s the right move for you.

6. Making Extra Payments

Making extra payments on your student loans might sound like a small step, but it can have a massive impact on your financial future. By paying more than the minimum, you can cut down on the interest you owe over time and get out of debt much faster.

Why Extra Payments Matter

Think of it this way: every extra dollar you put toward your loan goes directly to reducing the principal balance. The smaller your principal, the less interest you’ll pay in the long run. For example, if you owe $10,000 at a 4.5% interest rate and you add an extra $100 to your monthly payment, you could save yourself years of repayment and hundreds in interest.

How to Find Extra Money for Payments

Finding extra cash for your loans doesn’t have to mean sacrificing everything you enjoy. Here are a few realistic ways to free up some money:

• Take on a side gig: Even a few hours a week can add up to a meaningful amount.
• Cut back on small luxuries: Skip the daily $5 coffee or reduce streaming subscriptions.
• Use windfalls wisely: Tax refunds, bonuses, or even birthday money can go straight to your loans.

Target High-Interest Loans First

If you have multiple loans, focus your extra payments on the one with the highest interest rate first. This approach, often called the debt avalanche method, minimizes the total interest you’ll pay and helps you clear your debt faster. Once the highest-interest loan is paid off, move on to the next.

Even small extra payments can make a big difference over time. Stay consistent, and you’ll watch your debt shrink faster than you might expect!

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7. Budgeting

Budgeting might not sound like the most exciting thing, but trust me, it’s a game-changer when it comes to managing your student loans and getting your finances in order. It’s all about knowing where your money is going and making sure it’s working for you.

Tracking Your Income and Expenses

First things first, you’ve got to get a clear picture of your finances. Write down every source of income—whether it’s from a part-time job, a side hustle, or even some financial aid. Then, list all your expenses. Yes, all of them! Rent, groceries, transportation, and even those sneaky little subscriptions you forgot about.

Here’s a simple table to get started:

Category	Amount ($)
Income	XXXX
Rent	XXXX
Groceries	XXXX
Student Loans	XXXX
Other Expenses	XXXX

Setting Realistic Financial Goals

Once you’ve got everything laid out, it’s time to set some goals. Maybe you want to pay off $1,000 of your student loans in the next six months or save up for an emergency fund. Whatever it is, make sure it’s achievable. Small wins can keep you motivated!

Some goal ideas to get you started:

1. Pay off $500 of student loans in three months.
2. Save $300 for unexpected expenses.
3. Cut back on eating out to save $50 a month.

Adjusting Your Spending Habits

Now comes the hard part—tweaking your spending habits. Take a good look at where your money is going and see where you can trim the fat. Can you cook at home more often? Maybe cancel a subscription you barely use? These small changes can add up big time.

A smart budget, tailored to your income and expenses, can be your greatest ally in paying off your student loans while still enjoying life.

Using Budgeting Tools to Stay on Track

Staying consistent is key. Budgeting apps can be a lifesaver—they send reminders, track your spending, and even help you save a little extra each month. If apps aren’t your thing, a simple spreadsheet works just as well.

Budgeting might take a little effort upfront, but once you’ve got it down, it’ll feel like second nature. And hey, knowing you’re on top of your finances? That’s priceless.

8. Scholarships and Grants

When it comes to paying for school, scholarships and grants are like finding a treasure chest. They’re essentially free money that doesn’t need to be paid back, which makes them an absolute lifesaver for students trying to avoid excessive debt. The trick is knowing where to look and how to apply effectively.

How to Get Started

1. Check with your school’s financial aid office: They often have a list of scholarships and grants available for students, some of which are specific to your program or field of study.
2. Search online databases: Websites dedicated to scholarships can help you find opportunities tailored to your background, achievements, or even unique hobbies.
3. Explore local organizations: Community groups, businesses, and nonprofits frequently offer scholarships for residents or members.
4. Apply for the Forget Your Student Debt Grant: This grant is available to individuals with student debt, including those who have already started their careers.

Tips for Success

• Start early: Many scholarships have deadlines months before the school year starts.
• Tailor your applications: Make each one specific to the scholarship’s criteria to stand out.
• Keep track of deadlines: Missing even one can mean losing out on valuable funds.

Every dollar you earn through scholarships and grants is a dollar you don’t have to borrow. It’s worth the time and effort to apply for as many as you can.

9. Part-Time Jobs

Taking on a part-time job while managing your studies might sound like a lot, but it can be a game-changer for your finances. Not only does it help you earn extra income, but it also builds valuable skills that can boost your career prospects.

Why Consider a Part-Time Job?

• A steady paycheck can help you cover daily expenses like food, books, or transportation.
• You can use some of your earnings to make small payments on your student loans, reducing the amount you'll owe after graduation.
• Balancing work and school teaches time management, a skill that employers love.

Types of Jobs to Explore

1. On-campus jobs: These are super convenient because you’re already spending time at school. Think library assistant, teaching aide, or working at the campus cafe.
2. Freelancing gigs: If you have a knack for writing, graphic design, or coding, freelancing can be a flexible option.
3. Retail or food service: Sure, it’s not glamorous, but these jobs often have flexible hours and don’t require prior experience.

Tips for Balancing Work and School

• Set realistic hours: Don’t overwork yourself. Aim for 10-15 hours a week so it doesn’t interfere with your studies.
• Communicate with your employer: Let them know you’re a student and might need flexibility during exam periods.
• Stay organized: Use a planner or app to keep track of your work shifts, classes, and deadlines.

Remember, every little bit helps. Even a few hours a week can make a noticeable difference in your finances and reduce the need for future loans.

And hey, if you're lucky, some companies even offer tuition assistance programs to their employees. Check out our article on corporations offering financial assistance for a list of places that might help you with college costs while you work!

10. Emergency Fund

When it comes to managing your finances, an emergency fund is a total game-changer. Think of it as your financial safety net for when life throws you a curveball. Whether it’s a surprise car repair, a medical bill, or even a sudden job loss, having some cash set aside can make all the difference.

Why You Need an Emergency Fund

Life is unpredictable, and let’s face it, emergencies rarely happen when it’s convenient. With an emergency fund, you can tackle these situations without relying on credit cards, loans, or dipping into your budget for essentials. It’s all about peace of mind.

How Much Should You Save?

A good rule of thumb is to aim for three to six months’ worth of living expenses. Here’s a quick breakdown:

Monthly Expenses	Emergency Fund Goal
$1,000	$3,000 – $6,000
$2,000	$6,000 – $12,000
$3,000	$9,000 – $18,000

Start small if that feels overwhelming. Even $500 can be a great cushion for smaller emergencies.

Tips for Building Your Fund

1. Start Small: Even saving $10 or $20 a week adds up over time.
2. Automate It: Set up automatic transfers to a dedicated savings account so you don’t even have to think about it.
3. Cut Back Temporarily: Skip a few takeout meals or cancel a subscription you barely use. Put that money straight into savings.

Building an emergency fund is a marathon, not a sprint. Stay consistent, and you’ll thank yourself later when life throws you the unexpected.

Where to Keep Your Emergency Fund

You’ll want to keep this money somewhere safe but still accessible. Here are a few options:

• High-Yield Savings Accounts: These let your money grow a little faster with better interest rates.
• Money Market Accounts: A solid option with slightly higher returns and easy access.
• Traditional Savings Accounts: Simple and straightforward, though the interest rates are usually lower.

Having an emergency fund isn’t just smart—it’s empowering. It’s one less thing to stress about when life gets tricky, and it gives you the freedom to focus on what really matters.

Wrapping It Up

Managing student loans doesn’t have to feel like climbing a mountain with no end in sight. Whether you’re deferring payments, exploring forgiveness programs, or just tweaking your budget, every small step can make a big difference. The key is to stay proactive and keep your goals in focus. You’ve got this—one payment, one decision at a time. Here’s to a future with less debt and more financial freedom!

Frequently Asked Questions

What is student loan deferment?

Student loan deferment allows you to temporarily pause your loan payments, often without accruing interest on subsidized loans, during times like being in school or facing financial hardship.

How does forbearance differ from deferment?

Forbearance also lets you pause or reduce payments, but interest usually continues to grow on all loan types, which can increase your overall balance.

What are income-driven repayment plans?

Income-driven repayment plans adjust your monthly loan payments based on your income and family size, making them more affordable for borrowers with lower earnings.

Can I qualify for Public Service Loan Forgiveness (PSLF)?

You may qualify for PSLF if you work full-time for a qualifying employer, like a government or nonprofit organization, and make 120 qualifying payments under an eligible repayment plan.

Is refinancing student loans a good idea?

Refinancing can be beneficial if it lowers your interest rate or simplifies payments, but it may not be ideal for federal loans since you could lose access to federal benefits like forgiveness programs.

Why is having an emergency fund important while repaying student loans?

An emergency fund helps you handle unexpected expenses, like medical bills or car repairs, without missing loan payments or taking on more debt.