Sense & Centsibility Blog

Student Loans: What to Do if You Miss a Payment

Student loan burdenSince student loans are a hot topic right now, we're flashing back Elaina's post that provides helpful info on what to do if you miss a student loan payment.

Life happens and unexpected events can sometimes result in a financial crisis. When you have a limited amount of income that can mean making tough choices on what to pay for first. Hopefully you can avoid something like this from happening to you in the future, but in the meantime here’s what to do if you’ve already missed a student loan payment or two.

1. Don’t ignore the problem.

Open all your mail and stay informed. Then do what you can to minimize the negative effects and create a crisis budget, prioritizing all your expenses and focusing on necessities.

2. Contact your servicer right away.

Call or apply online for either a temporary forbearance or economic hardship deferment, depending on your situation as there are limits. Try to avoid falling further behind and make sure the terms are realistic for you before agreeing to anything.

3. Consolidate eligible loans.

If you haven’t done so, this can usually help reduce your monthly payments and unless you’re in default, it will bring your payments current if you’ve fallen behind. To help decide if it’s right for you, check out this post about consolidating student loans.

4. Check into payment options.

For federal loans, there are payments based on income (Income Based Repayment / Income Contingent Repayment) and there are even graduated payments where the payments start out smaller and are increased over time. Just like any loan, be aware of the potential consequences like negative amortization (balances increasing because payments don’t cover interest).

5. Beware of scams.

There are reputable organizations that may charge a fee for student loan counseling, but before paying anything, verify that they are certified by the National Foundation for Credit Counseling. Otherwise, don't pay for services that make crazy guarantees that sound too good to be true.

Also, there are other reputable and free resources available, including Student Loan Borrower Assistance, provided by the National Consumer Law Center and the Department of Education. If you’re already in default, visit

If your student loans are in good standing and you have some credit cards you’d like to pay off faster so you can focus on paying off student loans, LSS can help. Call us at 888.577.2227 or get started online at your convenience. Remember, our financial counseling sessions are FREE and confidential. We’re here to help you conquer your debt!

Author Elaina Johannessen is a Program Director with LSS Financial Counseling.