Student Debt and No Degree? Here’s What to Do

Student Debt, No Degree

If you took on student loans to pay for college but did not finish school, the debt doesn’t go away.

Dropping out for any reason starts the clock on repayment.

If not addressed, unpaid student loans will go into default, negatively affecting your credit and landing you in a world of financial hurt.

No matter what your reasons are for not finishing, there are things you can do to ease your repayment and even get you back on track to earning your degree.

Student Debt and No Degree? Here’s What to Do

Keep reading to learn about some of your options.

  • Finish Your Degree at a Less Expensive College

If it is possible for you to do so without having to take out additional loans, enroll at a local community college to finish your degree. By registering at least part-time, your loans will go back into deferment, buying you a little more time to complete your degree.

Keep in mind that deferment is a short-term solution.

Your focus should be on finishing your degree so that your education can begin working for you once you graduate.

As an added bonus, you will be able to use your new school’s job search and placement resources.

  • Work with Your Lenders

If you don’t know if your loans are federal or private, or how high your interest rate is, you’re not alone. A shocking number of people don’t know much about their student loans. However, it is never a bad time to learn everything there is to know about your loan.

Before you begin school again, figure out who your lenders are, if your loans are private or federal, and if you are headed for default. The answers to these questions will dictate your options going forward. Then, gather up your personal financial info and give your lenders a call.

If your loans are current, contact your lender and explore your repayment options (more on that below). If your loans are already in default or delinquency, you will need to get them current before you can begin undoing the damage to your credit score.

Keep in mind that if your loans have been in default for a long time, you may find that your loan has been sold off to a different lender – even if you have a federal loan.

  • Pick the Repayment Plan That Works for You

If you have private loans, you can contact your loan provider to find out if they can work with you to find a reasonable monthly payment.

It is not a call anyone is excited to make, but proving to your lender that you are serious about avoiding default or delinquency may help you. Your lender would rather determine how much you can afford than spending their time and resources pursuing payments from you.

If you have federal loans, you may be eligible for a number of income-based repayment options, some of which may drop your monthly payment down to $0.

A word of warning, however, that some income-based repayment options may result in tax consequences, particularly if you are married and file your return jointly.

  • Work in Public Service

If it is not realistic for you to go back to school, you can get a job in public service and apply to the Public Student Loan Forgiveness Program.

The Public Student Loan Forgiveness Program forgives student loan debt, regardless if the student graduated or not, after 120 qualifying payments have been made over the course of ten years.

We won’t sugarcoat it; this can be a tricky program to navigate, and many people who attempt it do not find the success they were looking for. But, if you are eligible, and can commit to making sure that the program has accurate information at all times, it can be a great option.

  • Try to Refinance Your Loans

If your loan is current and you are having trouble meeting your monthly payment, refinancing may make the installment more manageable. Refinancing may make you ineligible for opportunities for income-based repayment or forgiveness options but maybe worth it for a monthly payment that doesn’t stretch you too thin.

  • Get a Side Hustle

Finally, if your monthly payment is stretching you further than you can manage, regardless of any adjustments or programs available to you, your best option may be to look at earning money on the side.

A side hustle can not only be a fast-track to getting your loans under control but could also possibly get you valuable experience, which could help you find more gainful employment in the near future.

Having to leave college without earning a degree is a significant roadblock for many people, but it doesn’t have to be an impenetrable obstacle to getting on with your life. Take action now and get back on the road to achieving your goals.

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