Income Based Repayment

My Ph.D. in Engineering Left Me With Student Loan Debt I Can’t Afford

Written by Steve Rhode


Dear Steve,

I’ve accrued ~$450,000 of student loan debt in the pursuit of getting a PhD in engineering. My payments are around $4500 per month minimum from both private and federal loans. I can’t keep up with the payments, I’m slowly sinking into not being able to pay anything even though I have a good job.

What do I do? I’m absolutely overwhelmed. I haven’t defaulted yet, but I can’t maintain this. I feel like defaulting is a certainty at this point.



Dear Brandon,

What you are facing is very stressful and depressing. But this is not a problem that was created today. It is the result of taking on more student loan debt than your field can support.

Along the way, people and your school encouraged you to take out the debt. But when it hits the fan the blame is generally cast on the shoulders of the consumer. People will say when students fall for the line that more debt will result in better futures, they are to blame. Of course, that’s B.S.

Your choices here are fairly clear.

On the federal student loan debt, you can potentially lower the payment by enrolling in an income-based repayment plan. Not all repayment plans are created equal. Some are better than others if you are married or thinking of getting married. I would suggest you talk to an independent professional, like Damon Day, to better understand which plan fits your life.

Keep in mind that while the plan may reduce your monthly payment it will increase your balance due and promises eventual forgiveness after 20-25 years. We’ll have to wait to see if that actually happens.

On the private student loan side, your options are limited and strategically defaulting is a possible approach.

Defaulting with a plan can make sense if you are doing it as part of a larger plan. You also need to be aware it will hurt your credit, can lead to collection and legal action, and may result in you being sued.

READ  What Can I Do if I'm Delinquent on My Federal and Private Student Loans?

It can also result in settling the private student loan debt for less than you owe, potentially having the debt expire from under your statute of limitations, and possibly being discharged later in bankruptcy.

The best time to take action is now. You need to gather facts, data, and use it to talk with a knowledgeable professional like Damon Day to engineer a custom solution that fits your life and goals.

What we do know for certain is unless you do something, this is going to crumble without you having any control.

Choice1 Choice2 Choice3 Big Hug!
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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.


  • Great response! I hope the inquirer is teaching at a public high school, college or university for public service loan forgiveness. For the private debt, depending on his credit-worthiness-consider refinancing his debt. Maybe even use equity in his home to help make up the difference. I’m not a supporter of debt, but in today’s economy, it’s a double-edged sword.

    • I think the results as of today are that 98% of public service loan forgiveness claims for debt forgiveness have been denied. I worry we will see the same outcome in 20 years when people on income-driven repayment plans go for their promised forgiveness.

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