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I Didn’t Realize My Student Loan Payments Would Be So Expensive

Written by Steve Rhode


Dear Steve,

I just graduated from a private university with $96,000 in private student loans from Discover Student loans. I did not realize going into it that they would set such a high minimum repayment fee– of which I cannot pay back. I am 22 years old, on my own, and completely lost. I cannot pay the $900+ monthly. I contacted them and they said that they can only give me an additional 3 months grace period (I had already completed 1 month of repayment prior). My concern is what will happen after my 3 months are up.

I am currently taking a 2-year gap year before entering a Ph.D. program (which will be completely paid for– I learned my lesson the first time). I have the opportunity to build up my career before applying to the Ph.D. program by working as a researcher– only caveat is it doesn’t pay much. I am trying to supplement with another part-time job but I am still not earning enough to be financially independent– much less make these payments.

What should I do? I am doing this all on my own with no knowledge of anything. I do not think i can afford a lawyer or any debt mediator.

As I am going into a Ph.D. program (which will last 5-6 years) in the next two year or so, should I just default on payments? Will I be able to default once I am in the Ph.D. program? Should I file for bankruptcy to relieve myself of this private loan? That way, I will be in the recovering process while I am in a Ph.D. program and be okay once I finish the program?

How will this affect me? Will I have trouble finding an apartment for rent? If I get married in the next 7 years, how will that bankruptcy affect my partner?

Please help. I am so anxious and feel trapped. I would like to have a plan or know what to expect.

Thank you so much.



Dear Lily,

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I’m not quite sure what to say. It appears you took out these private student loans, received the benefit of them, and seemingly had no clue about the terms of the loans you signed for.

Discover Student Loans does offer some repayment assistance options. – Source

The options will either temporarily reduce your payment to interest only or give you a minimum payment that will increase your balance owed.

The two least confrontational options are to comply with the repayment terms you agreed to when you took out the loan or negotiate with the lender to come to a mutually agreeable solution. No private student loan lender is required to negotiate or compromise.

So this leaves you with some more confrontational options. In the face of unaffordable loans you may decide to default. This will of course land you in collections, you may be sued by the lender, but you might also negotiate a solution as part of that legal process. See Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan.

Depending on how your private student loans were used, some of the loan balance may be able to be discharged in bankruptcy. But both the default option and the bankruptcy approach would be best utilized only if you have a lawyer representing you who is both licensed in the state where you live and experienced in dealing with these issues.

I can appreciate that you feel trapped. It’s because you are trapped. The underlying education you’ve completed was apparently too expensive based on the cost and financing options selected.

There is most likely not going to be an easy solution here that does not involve you hiring an experienced lawyer or facing a lawsuit, wage garnishment, and default rates. And it will also negatively impact your credit.

But keep in mind, the fact no easy solution exists does not mean you don’t have options. They just are not magical options.

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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.

About the author

Steve Rhode

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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