Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Student Loans Student Loan Repayment What to Do About Your Student Loans if You Lose Your Job Updated May 23, 2023   |   5-min read Written by Jerry Brown Written by Jerry Brown Expertise: Credit, debt management, personal loans, student loans Jerry Brown is a freelance personal finance writer who lives in New Orleans. He covers a range of personal finance topics, including credit, personal loans, and student loans. Learn more about Jerry Brown Reviewed by Erin Kinkade, CFP® Reviewed by Erin Kinkade, CFP® Expertise: Insurance planning, education planning, retirement planning, investment planning, military benefits, behavioral finance Erin Kinkade, CFP®, ChFC®, works as a financial planner at AAFMAA Wealth Management & Trust. Erin prepares comprehensive financial plans for military veterans and their families. Learn more about Erin Kinkade, CFP® If you lose your job, you may have several options to avoid defaulting on your student loan. Federal student loans come with standard benefits that can help you during your time of unemployment, such as deferment, forbearance, and income-driven repayment (IDR) plans (more about these below). If you have private student loans, your options will vary depending on your lender. Below we’ll cover what you can do with your federal or private student loans after losing a job, and why you shouldn’t stop making payments without contacting your lender first. OptionDoes interest still accrue?How it worksAvailable for federal loans?Available for private loans?DefermentUnsubsidized federal loans and private loans: YesSubsidized federal loans: NoPayments pause for a certain period.✔✔(not all private lenders)ForbearanceYesPayments pause for a certain period. ✔✔(not all private lenders)Income-based repayment planYesPayments based on your income and family size.✔NoReduced payment planYesPayments lowered to fit your financial situation.✔✔(not all private lenders) In this guide: What should I do first about my student loans if I lose my job?What can you do with federal student loans if you experience job loss?What can you do with private student loans if you experience job loss?Reduced monthly payment options What happens if I lose my job and stop making payments? What should I do first about my student loans if I lose my job? The first action you should take after losing your job is to call your student loan lender to explain your situation. Your lender may be able to provide you with a solution to avoid defaulting on the loan. Note: We recommend this regardless of whether you have federal student loans, private student loans, or a combination of the two. If you’re unsure whether your loans are private or federal, start by visiting StudentAid.gov. After you log in with your FSA ID, you can view your federal loan details. If no information shows up, you don’t have federal loans. You might have federal and private loans, or just private loans. For more information about any private loans you have, you’ll have to contact your private student loan servicer. If you’re unsure who your lender is, the Consumer Finance Protection Bureau (CFPB) recommends requesting a free copy of your credit reports by visiting AnnualCreditReport.com. It will list all your loans, federal and private. What can you do with federal student loans if you experience job loss? You can take advantage of several federal loan benefits after losing your job. Here are three options to consider. Income-driven repayment The first option you should consider is enrolling in one of the four income-driven repayment plans the federal government offers. These plans base your monthly student loan payment on your income and family size. If you lose your job, you might qualify for a payment as low as $0. If you were enrolled in an income-driven repayment plan before losing your job, you could ask your loan servicer to recalculate your monthly payments. Deferment Student loan deferment allows you to pause your student loan payments for a specific time frame. Subsidized federal loans don’t accrue interest while in deferment, but you’ll still be charged interest on any Unsubsidized federal loans. You can defer your loans because of unemployment for up to three years. Forbearance Forbearance is similar to deferment, but interest will accrue regardless of whether your loans are Subsidized or Unsubsidized. You can request up to 12 months of forbearance at a time. What can you do with private student loans if you experience job loss? If you have private student loans, your options will vary depending on your lender. That said, many private financial institutions offer some type of deferment or forbearance. Deferment Some private lenders offer deferment if you decide to go back to school or enlist in the military, but they might not offer deferment for job loss. To see what deferment options might be available, contact your lender. Forbearance Many private lenders offer hardship forbearance. This allows you to pause your student loan payments for a specific time frame if you’re unemployed. Reduced monthly payment options Although private loans don’t come with access to income-based repayment plans, some private lenders might offer reduced monthly payment options if you’re struggling to repay your loans after a job loss. Contact your student loan servicer to find out whether this option is available. Here’s a list of private lenders that offer programs you can take advantage of if you lose your job. LenderProgramSallie MaeUp to 12 months of hardship forbearance InvestEDTemporary hardship forbearance in one- to three-month increments over a 12-month time frame SoFiUnemployment Protection DiscoverHardship forbearance and reduced payment planEarnestHardship forbearanceAscentUp to 24 months of hardship forbearance What happens if I lose my job and stop making payments on my student loans? The consequences can be severe if you stop making payments without contacting your lender first to weigh your options. First, it could lead to late fees. And depending on how late your payment is, your lender can report it to the major credit bureaus, which could cause serious damage to your credit. You’ll default on your student loan if you miss too many payments. This can cause even more damage to your credit. Federal student loans default once you’re 270 days past due, while most private student loans default once your payments are more than 90 days late. We always recommend you contact your lender or loan servicer as soon as possible to notify them about your job loss.