When you’re unable to pay back your student loans, you might feel upset and confused about your options. Some people might have told you that you can file for bankruptcy, and others may have said that you cannot. Either way, you might know that you don’t want to default on your loan. 

One of the most common questions we receive at our firm is whether or not a person can file for bankruptcy on a student loan. In truth, in about 98% of cases, this is not possible. However, there are alternatives. We’ve provided a general guideline to these alternatives and would be happy to talk with you about what is best for you during a free consultation. 

Repayment Options for a Student Loan

When you’re unable to repay your student loan, you may have the following options available:

  • Delay your payments with deferment programs
  • Get your loan canceled
  • Discharge your loan through bankruptcy (*when applicable)
  • Get a repayment schedule that meets your income
  • Consolidate your loans

Deferring a Student Loan

When you defer a student loan, you stop making payments for a period of time. You will need to qualify, and this is usually done through economic hardship, you are not working, or are returning to school. Most student loan deferrals only allow you to discontinue payments on the principal, but they may also stop any accumulating interest. 

Forbearance of a Student Loan

Forbearance of a student loan is similar to a deferral; however, they are easier to qualify for and will continue to accrue interest. You may seek forbearance of a loan when you become ill, have unforeseeable personal problems, or other reasons. If you believe you are unable to pay back the loan within the time for repayment, or your payments are more than 20% of your income, you may be granted forbearance. 

Filing for Bankruptcy for a Student Loan

Discharging a student loan through bankruptcy is nearly impossible, but for a small number of people who can show that repayment would cause severe hardship, they might qualify. You would need a lawyer to help you. 

Canceling a Student Loan

Some people will be able to cancel all or some of a student loan. Conditions that might allow this include:

  • The borrower of the loan has died
  • The borrower is suffering from a permanent total disability
  • The borrower has been diagnosed with a temporary disability
  • The borrower is in a rehabilitation program
  • The borrower is jobless
  • The borrower is experiencing economic hardship
  • The borrower is on active duty
  • The borrower is teaching or serving a needy population
  • The borrower works in community service
  • The borrower is working in the medical field or law enforcement
  • The borrower left school but was not refunded
  • The borrower was a victim of identity theft or fraud

Are You Interested in Learning About Your Options For a Student Loan That You Cannot Pay? 

If you would like to stop worrying about your student loan and find out how you can get ahead, call an attorney, like a bankruptcy attorney to find out what solution is best for your needs.