How to Get Out of Student Loan Debt

Many of the millions of Americans who struggle to pay their student loans want to know: Can I reduce or eliminate my student loan debt? In very limited circumstances, getting rid of student loan debt is possible. But most people won't be able to wipe out some or all of their loans.

On the upside, some people can reduce their monthly payments, get a temporary break from payments, or take advantage of other ways to manage their student loan payments better. On the downside, the One Big Beautiful Bill Act (the major tax reform law passed in July 2025) makes major changes to both current and future borrowers' repayment options and makes it more difficult for students to get debt relief in some circumstances.

Below is an overview of your options if you're struggling to pay your federal or private student loans. It also explains how the One Big Beautiful Bill Act changes the options for borrowers with federal student loans. While not much will change immediately—many updates go into effect in July of 2026—you should learn about upcoming changes and when they'll happen so you can get your ducks in a row.

Changes to Student Loan Repayment Plans Under the New Tax Law

The One Big Beautiful Bill Act replaces the older student loan repayment programs with fewer and simpler (and, most likely, more expensive) repayment options.

Specifically, this law ends the Saving on a Valuable Education (SAVE) program for student loans, as well as the Pay As You Earn Repayment (PAYE) and Income-Contingent Repayment (ICR) plans. If you're currently enrolled in one of these plans, you have until July 1, 2028, to pick one of the following: the (new) standard repayment plan, the (new) repayment assistance plan (RAP), the Income-Based Repayment (IBR) plan, or a graduated or extended repayment plan.

The only available repayment plans for new loans borrowed before July 1, 2026, will be:

• a standard repayment plan
• graduated and extended repayment plans
• RAP, and
• the IBR plan.

After July 1, 2026, the only repayment plans available for new loans will be a standard repayment plan and RAP.

Under the Act, all your student loans must be repaid under the same repayment plan. So, if you have multiple federal student loans you can't pick different repayment plans for different loans. Instead, you have to choose a single repayment plan for all your loans. For example, if you have loans made before July 1, 2026, and take out additional loans on or after July 1, 2026, you'll only have RAP and the new standard repayment plan as options.

How the Standard (Modified) Repayment Plan Will Work

The modified standard repayment plan gives borrowers more time to pay off their loans. Under the older standard plan, the repayment period was ten years. With the revised standard repayment plan, the repayment period is 10, 15, 20, or 25 years, depending on how much is borrowed (or outstanding amount, if the loan is in repayment). Here's the breakdown:

• if you borrowed less than $25,000 (or have less than that amount outstanding), the repayment period is 10 years
• if you borrowed $25,000 to $50,000 (or have that amount outstanding), the repayment period is 15 years
• if you borrowed $50,000 to $100,000 (or have that amount outstanding), the repayment period is 20 years, and
• if you borrowed more than $100,000 (or have that amount outstanding), the repayment period is 25 years.

How the Repayment Assistance Plan (RAP) Will Work

RAP uses a different formula than existing income-driven repayment plans, resulting in higher payments. The amount you have to pay depends on your adjusted gross income, ranging from a minimum of $10 a month to between 1% and 10% of your income. Borrowers must pay at least $10 per month. This plan includes an interest subsidy to keep loan balances from growing due to unpaid interest. You also get $50 off the monthly payment per dependent. Loans may be forgiven after 30 years.

This plan will probably become available around July 1, 2026.

How to Prepare for Upcoming Changes to Student Loan Programs and Options

Again, most changes don't go into effect until July 2026 at the earliest. But the Department of Education may start updating its student loan regulations sooner. Keep an eye on studentaid.gov for the latest news. And if you're enrolled in one of the plans that will be discontinued, be aware that your payments will probably increase when that plan ends. It's a good idea to start planning your budget now in case you need to make bigger student loan payments in the future.

Also, be aware that taking out new loans or consolidating your existing ones (see below), could lead to less-favorable repayment options.

Income-Driven Repayment Plans for Federal Student Loans

If your income is low or unstable, or you have very high student loan debt compared to your income, you might be eligible for lower payments under an income-driven repayment plan.

Income-Contingent Repayment (ICR) Plan

If you have a federal Direct Loan, you can opt for this plan, which calculates your payment amount based on your income. Under this plan, your monthly payment is the lesser of

• 20% of your discretionary income, or
• the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.

The One Big Beautiful Bill Act repealed this plan, and it will be phased out by July 1, 2028.

Income-Sensitive Repayment (ISR) Plan

In this plan, which is only available for certain types of loans (subsidized and unsubsidized Federal Stafford Loans, FFEL PLUS Loans, and FFEL Consolidation Loans), your payments are based on your annual income, family size, and total loan amount.

Income-Based Repayment (IBR) Plan

You can get an IBR plan for:

• Direct Subsidized and Unsubsidized Loans
• Subsidized and Unsubsidized Federal Stafford Loans
• all PLUS loans made to students, and
• Consolidation Loans (Direct or FFEL) that don't include Direct or FFEL PLUS loans made to parents.

This plan requires payments equal to 10% of your discretionary income if you're a new borrower on or after July 1, 2014 (but never more than the 10-year standard repayment plan amount) or 15% of your discretionary income if you're not a new borrower on or after July 1, 2014 (again, never more than the 10-year standard repayment plan amount).

If you haven't paid off your loan after 20 years (new borrowers on or after July 1, 2014) or 25 years (if you're not a new borrower on or after July 1, 2014), the government will forgive the remaining balance.

After July 1, 2028, this plan, along with RAP, will be the only remaining income-based repayment plans. But IBR won't be available to new borrowers after July 1, 2026.

Saving on a Valuable Education (SAVE) Plan

Under the SAVE plan, your payment is based on income and family size. Borrowers on the SAVE plan are temporarily excused from making payments, but interest will start to accrue on August 1, 2025.

The One Big Beautiful Bill Act also eliminated the SAVE plan. It will end by July 1, 2028. Borrowers in the SAVE program can pick a new repayment plan starting in July 2026 and must pick a new plan by July 1, 2028. If you don't pick a plan by then, any Direct Loans taken out for your own education will be placed in the RAP plan and any FFEL loans and any Direct Consolidation loans that repaid a Parent PLUS loan go into the IBR plan.

To learn more about the SAVE plan, visit the Education Department's website.

Pay As You Earn Repayment Plan (PAYE)

Under the PAYE plan, your maximum monthly payments are 10% of your discretionary income, and the government forgives the remaining balance after 20 years. The One Big Beautiful Bill Act also eliminated this plan, and it will be phased out by July 1, 2028. If you're in one of the eliminated plans, you'll need to switch by July 1, 2028.

Other Repayment Plans for Federal Student Loan Debt

Other types of repayment plans include a standard repayment plan, a graduated repayment plan, and an extended repayment plan. (The One Big Beautiful Bill Act eliminated the graduated and extended repayment plans for existing borrowers as of July 1, 2026. Only the standard repayment plan, which will be modified from its current form, will remain.)

Other Options for Dealing With Federal Student Loan Debt

You might consider consolidating your federal student loans, applying for a deferment or forbearance, or looking into whether you qualify for a discharge or cancellation of your federal student loans.

Consolidating Your Federal Student Loans to Reduce Student Loan Payments and Interest

A Direct Consolidation Loan allows you to combine one or more of your federal student loans into a single loan with one monthly payment. This kind of loan can be helpful if you want to reduce your interest rate, you don't qualify for another payment plan program, you qualify for another payment program but still can't afford the payments, or you want to get out of default.

Deferring or Forbearing Your Federal Student Loans to Delay Paying Student Loan Debt

A deferment excuses you from making student loan payments for a set amount of time because of a specific condition in your life—such as returning to school, economic hardship, or unemployment. Interest won't accrue on subsidized loans during the deferment period. Under the One Big Beautiful Bill Act, new borrowers on or after July 1, 2027, can't get a deferment based on unemployment or an economic hardship.

With loan forbearance, your loan holder permits you to stop making payments for a set amount of time or to make reduced payments temporarily. The One Big Beautiful Bill Act limits many forbearances to a maximum of nine months in a two-year period for borrowers who take out new loans on or after July 1, 2027.

Canceling Your Federal Student Loans

In some situations, you can get rid of your student loans altogether, which is referred to as student loan "forgiveness," "cancellation," or "discharge." You must meet very specific criteria. Sometimes, you can cancel part of the loan but not the entire loan.

The circumstances in which you might be able to cancel your student loan include:

• You attended or were enrolled in a school that closed while you were there, before you started classes, or within a certain time frame afterward.
• Your school engaged in misconduct (called "borrower defense to repayment").
• Your school refused to refund you the money that it owed to you because you didn't attend the school or withdrew.
• Your school didn't make sure that you were qualified to attend the program, called "false certification."
• You work in certain occupations after graduation, like teaching or some public service jobs.
• You're unable to work because of an illness or injury—a total and permanent disability—that's expected to continue for five or more years or result in your death.
• If the person owing the loan dies, the loan obligation ends.

While the One Big Beautiful Bill Act didn't end these programs, it does change some of the programs' rules, such as in the case of a closed school or when the school engaged in misconduct, making it harder for borrowers to qualify for relief.

Discharging Federal Student Loans in Bankruptcy

Generally, it's been very difficult to discharge student loans in bankruptcy. You must demonstrate that it would be an undue hardship for you to pay them, and courts have historically been reluctant to find that debtors meet this standard.

However, some new legal developments could potentially improve the process for discharging federal student loans in bankruptcy. In 2022, the Biden administration introduced a new student loan bankruptcy policy to theoretically make it easier for borrowers to discharge their student loan debts. The Department of Justice, now in charge of student loan discharge proceedings, helps maintain a transparent process, and ensuring those who qualify get appropriate relief.

Student loan borrowers have to fill out a lengthy form explaining their financial struggles and making their case for a discharge. Filers still have to meet the strenuous "undue burden" test by demonstrating an inability to repay the loans. The Justice Department, along with the Department of Education, reviews the information provided, applies the factors that courts consider relevant to the undue hardship inquiry, and then determines whether to recommend that the bankruptcy judge discharge the borrower's student loan debt.

Getting Help With Your Federal Student Loans

To learn more about options for federal student loans, visit the U.S. Department of Education's Federal Student Aid website. You can also call your loan servicer. If you have a Federal Perkins Loan, contact your school.

To get assistance in dealing with your servicer or to get help understanding the different repayment, deferment, forbearance, and forgiveness options for federal student loans, consider consulting with a student loan attorney or debt negotiation attorney who deals with student loans.

Debt Relief Options for Private Student Loans

Private student loans come from private lenders, such as a bank, credit union or another financial institution, not the federal government. The One Big Beautiful Bill Act doesn't affect private student loans.

Private student loans have different terms and conditions that often vary significantly between lenders. To get a private student loan, you apply directly with the lender. Unlike federal student loans, a private lender will consider your credit scores. Approval of the loan and the interest rate, which is usually higher than federal student loan rates, you'll get are based on your creditworthiness. Generally, people take out private student loans when federal student loans, grants, and scholarships don't cover all of their educational costs. Private loans don't offer the same protections as federal loans, such as income-driven repayment plans, ways to get out of default, or loan forgiveness programs.

But if you're having trouble paying your private student loans, you might have one or more of the following options or other options:

• deferment or forbearance
• refinancing your loans, and
• alternate repayment plans.

Private student loan lenders are often willing to negotiate because they don't have the same collection tools the federal government has, such as tax refund offsets (also called "Treasury offsets"). (The federal government can take tax refunds, seize Social Security benefits, and garnish wages without going to court to collect unpaid student loans.)

Deferment and Forbearance of Private Student Loans

When it comes to private student loans, student loan "deferment" and student loan "forbearance" both refer to a temporary pause in making your student loan payments. (For federal student loans, deferment and forbearance are two separate programs.) Deferments and forbearances are sometimes available (not always) to borrowers in specific situations.

In a deferment, you don't make any payments on your student loans. The rules and availability vary significantly from lender to lender, so it's essential to contact your loan servicer to understand their specific policies.

Refinancing Private Student Loans

If you have good credit, you might be able to refinance your loans with a new lender. If you can lower your current interest rate, you might be able to save a substantial amount of money. Your new lender might also offer more alternatives than your current lender if you eventually have trouble making the payments.

To qualify for refinancing, you typically need good credit (high 600s or above), a history of on-time payments, and sufficient income to cover your debts.

Cancellation and Other Options

Alternative Repayment Plans

Many private lenders offer various repayment options, such as interest-only repayment (where you pay only the interest for a limited time), an extended repayment program, or an interest rate reduction (where the lender temporarily reduces your interest rate).

Under the federal Servicemembers Civil Relief Act, if you go on military active duty after taking out a private student loan and the loan's interest rate is more than 6%, you have a right to reduce the interest rate to 6% while you're on active duty. This reduction isn't automatic—you have to ask for it.

Negotiating with Private Student Loan Lenders

You might be able to negotiate with your creditors to lower the overall amount due. Or your lender might be willing to work out a more manageable repayment plan or offer temporary relief options.

Debt Collection and Private Student Loan Lenders

Private lenders often hire collection agencies to collect unpaid student loans. The federal Fair Debt Collection Practices Act (and perhaps state law) gives you the same rights and protections that you get with other debt collectors, including the right to stop debt collection harassment or abuse.

How to Find Out About Relief Options for Your Private Student Loans

Contact your servicer to find out what alternatives the lender offers. Before agreeing to a particular relief option, verify the terms, such as whether you'll have to pay fees and how long the program lasts. Ensure you get this information in writing before enrolling in the program. Then, get confirmation that you're enrolled.

How to File a Complaint or Get Further Assistance With Private Student Loans

If you have a complaint about a student loan servicer, contact your state Attorney General's office and the Consumer Financial Protection Bureau. Also, your state could have a consumer protection office, department of banking, or student loan advocate (typically called an "ombudsman") who might be able to help you.