Should I Stop Paying My Penn State Student Loans?


Dear Steve,

I went to Penn state from 2012-2015 and gained a HUGE $100,000 of debt (now at $80,000).

Initially, I had probably seven different types of loans. When I applied to PSU, I was out of state, applied for FAFSA, 60 or so scholarships, and all the financial aid I could get. Well, it barely helped as I’m still in massive amounts of debt.

A few years ago, I successfully refinanced and brought my payment from $1300 a month to $830 a month.

Now I am suffering, and I don’t qualify for any type of relief because it’s now a private student loan through Navient. I own a home now too. This $830 payment is killing me. I can’t save money. And I can barely pay my bills.

Should I stop paying my loan?



Dear Carly,

Converting federal loans into private loans is typically never a good thing to do. But you discovered that on your own.

We can engage in all sorts of academic debates about the right thing to do, but ultimately this comes down to a math problem.

Your income can either support the required payment or it can’t.

It is impossible to manufacture income out of nothing.

So, defaulting on the private student loan may be more of a reality than a choice. And defaulting with a plan can be a reasonable plan in the face of impossible odds.

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

But I would urge you not to do anything impulsive or rash.

I’m a pilot. Walking out to the airplane and flying away without doing any flight planning would be insane. A good cross-country flight planning session is exhaustive and gathers all the data that might impact the trip. That’s what you need for your situation.

Should I Stop paying My Penn State Student Loans?

You need some student loan flight planning to determine precisely what you should do, what to expect, and where you will land.

I would strongly suggest you contact my debt coach friend Damon Day and work together to evaluate your current situation and develop a plan of attack to resolve this situation with a likely, organized, and logical strategy.

See also  I'm So Far in Student Loan Debt There is No Hope for Me. - Adam

One potential outcome might be lower monthly payments and a settlement for less than you owe.

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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3 thoughts on “Should I Stop Paying My Penn State Student Loans?”

  1. If you’ve just gotten this loan and have only made one payment, defaulting now might give some indication of bad-faith to the lender. But as Steve said, making the payment is a matter of affordability- either you can afford to make the monthly payment, or you can’t. Call the lender and see what options they might have to give you some relief. I hope you’re able to find a reasonable resolution.


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