How to Handle College Loans on Low Income

Taking that first step out of college can be a scary thing. Until then, you might have always been in an education system that provided you with your daily routine. You might have left to live on campus while completing your studies in college. Once you graduate, you are thrust into a world of self-sufficiency. You will be responsible for finding a job, a place to live, and paying any bills. One of your first bills will be your college loans.

Handling college loans can be as scary as leaving college for the real world. However, you can take your college loans into your own hands in many ways. Here we will discuss your options for paying off college loans, what to do if you can’t pay off college loans, and what will happen if you don’t pay your loans back.

Paying Your College Loans

Once you leave college, whether you graduate or not, you must repay any money you were loaned. You must repay your college loans after a grace period has passed for most loans. Federal loans have a six-month grace period before repayment is expected. Parents with PLUS loans can request a six-month grace period before repayment once the student with the loan falls below half-time enrollment.

Once you begin to repay your college loans, you will be expected to do so monthly. You’ll also be expected to pay back any interest built up over your time in college (or if you had a period where your payments have been deferred). You should know that you will be required to pay off your student loans, whether working or not, after you leave college.

If you are repaying a federal loan, you can choose how you repay your loan. Your payment plan can be altered to suit your existing financial situation better. If you need any help with making payments on your student loans, be sure to visit the website of your loan provider to see what options you may have. For example, you can change the amount of your loan repayment amount, or you can halt payments altogether for a short period.

How to Handle College Loans with Low Income

You might wonder how you are supposed to pay off student loans only six months after leaving college. What if you don’t have a job? What if you find a job but have more expenses to worry about? Only some people who leave college go back home to live rent-free. If you find yourself in a situation where you are in financial straits, there are some things you can do to help make the process of paying off your student loans more manageable.

Get Any Job That Pays

After graduating from college, you might feel obligated to find employment that matches your degree. Sometimes, the job market might not be as accommodating as you would like. If you find this to be your situation, don’t be alarmed. Widen your job search to include anything that will pay. If you have some income, you can allocate some of that toward paying off your student loans.

If you qualify as low-income, you can alter your student loan payment program to reflect your current income. You must report it to your loan provider to benefit from this option. Let your loan provider know if you change jobs or find less income than before.

Use your school’s resources if you need help finding a job after college. Many colleges have job-finding resources that can help you when needed. From help with writing your resume and highlighting job-specific skills to setting up meetings with businesses that may favor candidates from your college, anything that can help will benefit your income should you get a job.

Take Up a Side Hustle

If you land a job right out of college and find that your income is still being stretched thin by your loan payments, consider getting a side gig to supplement your earnings. Side hustles have become much more popular as part-time jobs are flexible enough to be performed around your main form of employment. Side hustles come in a wide variety of jobs. Be sure to pick the one that suits your lifestyle without wasting your free time.

A famous side gig is a ridesharing job. If you own a car, you can make money driving others around in your city or state. Companies like UBER or Lyft can allow you to make money by picking up fares and dropping them off at their destinations. You can make a substantial amount of money doing this part-time or full-time. If you already have a job, consider this side gig on your off days or during the weekend. And, if you don’t have a car, you can still deliver food and packages with UBER by walking or riding a bicycle.

If you’re not keen on sharing your car with strangers, consider a side gig closer to home. You can create a blog or vlog that can be used to garner viewers and turn into a profitable job. Many people make videos of things they are passionate about and put them online to start conversations or get attention. If enough people find your content compelling, you can grow an audience and monetize your views. This might take a while, but the result can be worth your time.

What Happens If I Can’t Pay My Loans at All?

Everyone runs into emergencies sometimes. Maybe you had a job, and you lost it for whatever reason. You may have to allocate your money to a different expense. How do you deal with your student loans if your income changes drastically? There are a few ways to do so.

  • Apply for Disability Discharge

If you become disabled and cannot repay your student loans, you can use the Total and Permanent Disability Discharge program to end your loan obligation.

  • Ask at Your Job

Let’s say you work but need to make more to pay back your monthly loans. You can ask if your employer would help you to pay off your student loans. This form of repayment will be taxed, so be prepared to see that come tax time. Sometimes these student loan repayment benefits are not readily advertised, so feel free to ask whether it exists at your job. Even if it’s not offered at your job, asking about it might be enough to have human resources add it as a benefit.

  • Bankruptcy

This is an extreme hardship, and having student loans discharged this way can be difficult. However, contrary to popular belief, having certain student loans eliminated through bankruptcy is possible. If you are filing for bankruptcy, consult a bankruptcy lawyer before making any big decisions. Once you file for bankruptcy, your student loans will instantly be in default. This means they will be due immediately, and you won’t be able to make the duplicate monthly payments you used to make.

  • Military Service

Your college loans can be forgiven if you join the military. Unfortunately, there isn’t one blanket student loan forgiveness program, as each part of the military has its method for dealing with student loans. If you don’t want to commit to the military, you can also find student loan forgiveness by joining the Peace Corps or volunteering at AmeriCorps. Even if you don’t have the entire amount taken care of, you can still reduce the entire amount by a large sum, and then you can refinance the remainder of the loan to save money.

  • Loan Repayment Assistance Programs

Your state might have a way to help you achieve loan forgiveness through LRAPs or loan repayment assistance programs. These programs help pay back your student loans, but they also require you to work a job that pays better. You will still have to make loan payments, but if you qualify for an LRAP, you’ll receive quarterly payments. To continue to qualify for repayment, your income must stay at a certain level (determined by the terms of the LRAP). If your income increases, you will no longer be eligible for repayment through the LRAP.

In Conclusion

If you think you need a way to make payments on your student loans or find yourself in a difficult financial situation, remember that you have options. First, research some loan repayment programs to see if there is one that suits your needs. If you’re currently working, you could have your job pay some of your student loans back. Even if it isn’t advertised, it doesn’t hurt to ask!


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