Should I Stop Making My Private Student Loans Payments Since I’m Just Getting Deeper in Debt?


Dear Steve,

My student loan payments are almost $800 a month, and as a result I’ve been using my credit cards to help cover my bills, emergencies, even food for the last few years. The situation I am in now is that in addition to my student loan debt, I now have about $37k in credit card debt as well. This situation is feeling quite hopeless, and I’m not sure what the best course of action is. I also tried to refinance my loans last week and it was denied.

Based on the fact that I have to put my bills on credit cards, in order to make my loan payments, should I just stop paying on my private loan?



Dear Lauren,

In a better world, I’d have a magic wand to wave and make the situation kinder.

These are the facts as I read them:

1. You have private student loan debt that is too much to handle.
2. To make ends meet you are using credit cards but that is just making your debt grow.

Absent any meaningful private student loan program to reduce your payment with the cooperation of your lender, the math really dictates your options here.

The credit card debt is going to become completely unmanageable. At some point, the minimum payment will be more than you can afford and you will default.

The issue is if you decide to default with some plan in place or just let the default and collection bus run over you.

Defaulting with intention is a strategy to deal with unmanageable private student loans. Read Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

If you approach this situation first by developing a comprehensive plan of action to deal with your overall financial situation, I feel confident you can emerge in a better financial position than you are in now.

See also  There Are No Solutions For Us to Get Out of Debt That We Can Afford

Dealing with your situation is most likely a two-stage approach. There are some considerations about the type of private student loans you have, what they were used for, and where you went to school. Some private student loans can be discharged in bankruptcy. And a Chapter 7 bankruptcy for your credit card debt is a reasonable second part of the plan.

This approach would give you a fast second chance. What needs to be determined is the best way to manage to deal with your specific private student loans and getting the timing right.

I would strongly suggest you arrange a consultation with either Michael Bovee or my friend Damon Day to come up with an intentional plan you can execute.

I don’t see your situation as hopeless as much as I see it as needing a plan and taking some work to execute the plan.

Don’t give up, take charge.

Damon Day - Pro Debt Coach

Follow Me
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.
Steve Rhode
Follow Me

Comments are closed.