What happens next Where's my refund? Best CD rates this month Shop and save 🤑
MONEY
Wall Street

What to do when student loans got you down

Robert Powell
Special for USA TODAY
Student loans can be overwhelming.

Q: My daughter's student loan lender wants her to pay $1,000 a month toward her overall student loan debt of more than $90,000. She is not making enough to pay that amount back yet. What should she tell the loan company? — Theresa Miles, Hampton, Va.

A: First, determine if the loans are from private lenders rather than the federal government. If she has private student loans her options are very limited, says Kevin Weeks, president of the Financial Counseling Association of America in Washington, D.C., formerly known as the Association of Independent Consumer Credit Counseling Agencies.

One option: Some lenders offer private consolidation loans for private education loans, according to FinAid. So your daughter might try to consolidate her loans with a different lender to see if she could qualify for better terms, says Weeks. Visit www.finaid.org/loans/privateconsolidation.phtml to find a list of lenders that offer private consolidation loans.

Student loan debt: America's next big crisis

According to FinAid, the main benefit of such a consolidation is obtaining a single monthly payment. "Also, since the consolidation resets the term of the loan, this may reduce the monthly payment (at a cost, of course, of increasing the total interest paid over the lifetime of the loan)," FinAid notes on its website.

If your daughter has federal education loans, visit studentaid.ed.gov/sa/repay-loans/consolidation. That site reviews the pros and cons of consolidating federal education loans, most of which are eligible for consolidation.

One last note: Private student loans cannot, in general, be consolidated with federal student loans, reports FinAid.

Top 5 things to do about your student loans after graduation

Robert Powell is editor of Retirement Weekly, contributes regularly to USA TODAY, The Wall Street Journal and MarketWatch and teaches at Boston University. Got questions about money? Emailrpowell@allthingsretirement.com.

Featured Weekly Ad