Student loan modification: how to temporarily reduce payments


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Your monthly student loan payment can be unaffordable on top of your other financial obligations. If you are having trouble paying your monthly bill, you may have options to temporarily reduce your payments.

First of all, you need to know what type of loan you have – federal or private. There are no options to reduce your federal student loan payments in the short term, only long term options like income-based reimbursement or suspend payments via a adjournment or abstention.

If you have private student loans, however, your lender might offer you the option of modifying your loan by temporarily reducing the payment or the interest rate temporarily. For example:

  • College Ave offers a six-month temporary installment repayment option that lowers monthly payments to cover interest charges or as little as $ 25 per month, depending on what the borrower can afford.

  • Discover offers borrowers the option of reducing their minimum monthly payment to an amount greater than or equal to the amount of monthly interest, but less than the payment they are currently making.

  • MEFA asks borrowers to contact its provider, American Education Services, to request changed payment terms, which may change a payment due to short-term financial issues.

You will need to contact your lender to find out what payment reduction options are available. Some lenders may even give discounts on a case-by-case basis if there is no formal program.

Ask about short-term hardship programs if you can handle a lower payment and your difficulty is temporary. As long as you cover the monthly interest, your reduced payments can prevent your loan balance from growing and keep your payment history on time.

If you can’t reliably make even the smallest payments, consider your lender’s deferral or forbearance options instead. The downside is that the accrued interest will be added to your principal balance once you resume payments. Lender programs are generally capped at 12 to 24 months.

If you have private loans and your repayment outlook changes for an extended period, contact your lender to find out what options, if any, are available to permanently change your loan payments. Keep making some kind of payment every month to help you avoid fault.

Get help with a student loan when you’re struggling financially

Your best first option whenever you’re struggling with your student loan debt is to speak with your server or lender to:

  • Discuss repayment options.

  • Take a temporary payment break.

  • Temporarily reduce your monthly payments.

If your issue is with your lender or service agent, or if you’re not getting the help you need, look for a legitimate student loan assistance organization that offers advice. Consider these other approved resources for student loan help; these are established organizations with verified track records:

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