Some Options

EDU Debtors Union is primarily an advocate for options when it comes to repaying student loans.  Because every student loan has been stripped of standard consumer protections it is especially important that student debtors are aware of repayment options (refusal to pay is also an option).  And because the traditional loan protections do not exist – i.e., usury & bankruptcy protections and the Truth in Lending Act (TILA) – sometimes those options have to be non-traditional.

What you can do now:

1. Income-Based Repayment (IBR) 

This program is designed to help borrowers whose income does not enable them to repay their student loans during the standard 10-year repayment period.  IBR can reduce your monthly loan payments to 10% of your income, and will forgive any remaining amount after 25 years of payments.

CAUTION: the lower your monthly payment, the more interest accrues, which means at the end of 25 years your outstanding loan amount could still be astronomical.  Whatever amount is forgiven is considered TAXABLE INCOME.  Please be cautious and do the math, especially if your total debt is over $50,000.  You may actually be paying more with IBR.  Also, you cannot miss any of the 300 loan payments over 25 years to be eligible.

This program is only available for federal student loans.


2. Public Service Loan Forgiveness After 10 Years: 

This program is only available for federal student loans.

If you work for a public service organization over a period of 10 years while making student loan payments (120) any outstanding amount will be forgiven.  You must work full-time (annual average of 30 hours per week) for a 501(c)(3) non-profit, federal/state/local/tribal government (this includes military & public schools and colleges) or serve in the Peace Corps or AmeriCorps (full-time).

The good news is that the 120 payments do not have to be consecutive, but just have to be made while you are working in public service.  Each payment must be made through the William D. Ford Direct Loan Program in one of these plans:

  1. Standard Repayment plan
  2. Income Contingent Repayment plan
  3. Income-Based Repayment plan

CAUTION: this plan only started in October 1, 2007, which means to date no one has successfully completed this program and had their loans forgiven.  The first eligible forgiveness will happen in October 2017.  Also, any forgiven amount is considered taxable income.


3. Get a Sugar Daddy

Through and other host sites, you can negotiate a Sugar Daddy/Sugar Baby arrangement that includes student debt repayment.  For more information, see the article in the Huffington Post:

CAUTION:  This should be obvious, but we’ll say it anyways.  There are a lot of weirdos out there.  Be cautious of anyone who wants to be your internet Sugar Daddy.


4. Bankruptcy Work-Around

Take out as many credit cards as possible and live on them for as long as you can.  Meanwhile, use 100% of your income to repay your student debt.  Then, claim bankruptcy on your credit card debt.  The downside: your credit is ruined for a number of years.  The upside: you managed to repay your student debt, or at least worked it down to a manageable amount.  CAUTION: This is just an idea, EDU Debtors Union has no evidence that this is an effective strategy.


5. Leave the country

If you live in a foreign country, the U.S. cannot garnish your wages or your social security benefits.  Obtaining citizenship in another country, however, poses its own set of problems.

See also: EDU Wish List