Many Americans fall into this camp of individuals who took out loans but for one reason or another had to stop going to school. Maybe they got sick, had to drop out to take care of a family member, or perhaps their current education path was not for them. Whatever the reason may be, if this is you, then you probably realized that you still owe payments on those loans. Here are some things you can do to handle this tough situation.

Look into Income-Based Repayment Plans

As soon as you leave school, you will probably default into a standard 10-year repayment plan. However, this may be out of your budget, and you need to find an alternative to handle the debt. For most federal loans, you can usually get into an income-based repayment plan. These payment plans are based on your income, which payments are capped at 10-15% of your discretionary income. What is nice about these payment plans as well is that they can be as low as $0 if you don’t earn any income or are below your state’s poverty line. This can be extremely useful to those who can’t work due to certain circumstances.

Beware of Forbearance and Deferment

Some of the more recent headlines are how certain student loan lenders mislead borrowers down the path of forbearance or deferment instead of giving them information on other more viable and less financially taxing options such as an income-based repayment plan. Forbearance or a deferment may help in the short-term, but keep in mind that your interest will accrue and the amount of money that you will owe will balloon. If you can find a repayment plan that is affordable, it is always better to make payments so that you do not end up owing a significant amount of more money than you originally took out.

Public Service Loan Forgiveness

If you dropped out because you felt your current education path was not right for you, then maybe you can consider going into some public service field. Look into which ones qualify for the Public Service Loan Forgiveness program, which forgives the amount of money you owe on your loans after you have made 10 years’ worth of payments. Although this option may not be available for much longer for the 2018 government budget is aiming to get rid of PSLF, with a cut off date of July 1, 2018.

Figuring Out a Different Path

If you go back to school, even if it’s only part-time, your loans will go back into deferment. However, as we have mentioned before, if you can afford to put money towards your loans while you are in school, that will be better for you in the long run. In this article, we discuss methods that you can use to start tackling your debt while you are in school instead of waiting until you have graduated. This will ease the burden for you in the long run.