Question: My student loans are over 10 years old, I don’t work in the field I graduated in, and one of the schools has closed. I can’t afford to retire — I’m 67 and I can’t live on social security alone. I paid and had a foreclosure against me, and now it’s three times what I borrowed. I am expected to pay $600 per month. I can’t afford to feed myself. What can I do?

To respond: Borrowers with less than perfect credit records face challenges when getting out of debt, and they can get worse when you’re older, as incomes tend to plateau. The pros offer steps to help you navigate — from possible loan release from a closed school, to income-based repayment plans that could significantly lower your payments. (Note that income-based repayment plans won’t be available if you’re refinancing your federal loans, so you probably won’t want to go that route. However, for borrowers with private loans, refinancing may be attractive now because rates are low. .)

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According to Anna Helhoski, student loan expert at NerdWallet, student borrowers nearing retirement are in a tough spot, especially if they’ve taken a forbearance or two, or have a past default that has slowed them down. . “The interest also takes its toll over the years,” she says. So much so that an initial loan of, say, $20,000 can triple into a $60,000 debt, thanks to time, interest and penalties, says Andrew Pentis, loan expert and certified student loan counselor at StudentLoanHero. .

“It’s actually very common,” adds Pentis. His firm’s research shows that “the vast majority of borrowers” do not repay their loans on a standard 10-year plan. “They usually persist for years and years and years.”

Federal student loan borrowers who have defaulted may have Social Security benefits or, for that matter, tax refunds garnished to pay overdue debt. “It’s just the way the rules are right now,” Pentis says. “In some cases, a borrower could have all of their federal payments garnished, depending on the size of their debt and their Social Security.” (Until November 1, 2022, the government has suspended the seizure of these payments.)

Adopt an income-driven repayment plan if you can

Experts agree that the best possible option for this borrower to reduce the monthly charge would be to apply for an Income Based Repayment (IDR) plan. There are four, and all are designed to keep monthly payments affordable relative to income.

“This could be particularly useful for borrowers looking to retire, as it lowers your monthly payment. If your payment is low enough – less than the interest part of your payment – ​​the government can cover part of the interest and the rest could eventually be forgiven,” says Helhoski “It takes a long time — up to 20 years once you sign up for an income-driven repayment plan.”

A flaw can complicate things, Pentis acknowledges. “It’s not too late for the IDR,” he said. “What they would need to do is rehabilitate or consolidate their loan with the federal government by catching up and making payments. It is highly unlikely that they will be able to catch up quickly because they simply do not have the income to do so.

Also manage other debts

Pentis recommends contacting a certified student loan or credit counselor and enrolling in a debt management plan that will take into account balances from loans, credit cards, and other sources. They can work with borrowers to put a plan in place to avoid these garnishments and put them on the right track to becoming debt free. This will free up revenue for meals.

Find out about student debt relief

On the other hand, the fact that one of the academic institutions attended by the borrower is closed deserves attention. “There is such a thing as a federally closed school discharge,” says Pentis, adding that there are requirements to qualify for a full or partial debt discharge. This includes being registered when it closes or opting out 120 days before it closes. The forms on studentaid.gov include the details.

Regarding the borrower’s point about not working in the field studied in college, Leslie Tayne, Founder and Managing Director of Tayne Law Group, points out that this is not relevant to student loan repayment. . “You can’t deny a degree — or not pay for it — because your career has followed a different roadmap in a different industry,” she says.