My College Loans From 1994 Keep Increasing. I’ll Never Pay Them Off.


Dear Steve,

I graduated college in 1994 with $21k in federal student loan debt. Long story short, 23 years later, after several deferments, forbearances and start and stop payments due to different financial circumstances, I now owe over $108,000!!

What can I do? Is there any chance of a settlement or partial forgiveness?



Dear Pat,

What are you doing?

Deferments and forbearance only increase the debt with no path to forgiveness. And if you ever feel into default up to 20% of your balance can be added as a collection fee.

At the very least you should have consolidated your federal loans into a new Direct Loan and then opted for an income driven repayment option like the IBR or PAYE. This way your loans would be forgiven after 25 years.

Granted, the IBR or PAYE can also result in an increased balance owed, see this, but at least you can reach forgiveness in 25-years.

Settlement on federal loans is not an option. Forgiveness is an option if you qualify as a public service worker or through an income driven repayment plan.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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