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This week: A reader is trying to find legitimate ways to lessen his payments, but it's not easy.

3 minute read

Question: I graduated from college last December and now have to start paying back my student loans. I got $29,000 in loans, but there’s no way I can make the monthly payments on my salary. (I just got a full-time job in May.)

I’ve heard there are programs that lower your payments, but I also hear there are a lot of scams out there. When I search for “how to reduce student loans,” I get lots of companies trying to sell me stuff, but very little objective information.

So are there really government programs? And if there are, why doesn’t the government ever mention it?

— Andres in California

Howard Dvorkin CPA answers…

Yes, the government wants to help you pay off your student loans. No, the government doesn’t tell you much about these programs. Using your search terms, it took until the middle of the second page of search results to find this explanation from the U.S. Department of Education.

In fact, the federal government does a downright awful job publicizing these programs to the very people who need them most — and that’s not just my opinion. It’s also the government’s.

Back in August 2015, the U.S. Government Accountability Office released a damning report on student loans. It’s title: Education Could Do More to Help Ensure Borrowers Are Aware of Repayment and Forgiveness Options.

Sure, the report says, “these plans provide eligible borrowers with lower payments based on income and set timelines for the forgiveness of any remaining loan balances.” However, “many eligible borrowers do not participate.” Why? Simple. They don’t know about them.

“As a result, borrowers who could benefit from the plans may miss the chance to lower their payments and reduce the risk of defaulting on their loans,” the report concludes.

The GAO even suggests the federal government offer “streamlined processes for learning about” these programs, with “enhanced communications targeted to borrowers most likely to benefit from these plans.”

Let’s take a look at how it works now. That search result I mentioned earlier is a page from the federal government’s Federal Student Aid website. Here’s exactly what it says…

An income-driven repayment plan sets your monthly student loan payment at an amount that is intended to be affordable based on your income and family size. We offer four income-driven repayment plans:

  • Revised Pay As You Earn Repayment Plan (REPAYE Plan)
  • Pay As You Earn Repayment Plan (PAYE Plan)
  • Income-Based Repayment Plan (IBR Plan)
  • Income-Contingent Repayment Plan (ICR Plan)

If you’d like to repay your federal student loans under an income-driven plan, you need to fill out an application.

Here’s the silly part: That list of programs don’t contain any links or definitions. Do you know the difference between an income-based and income-contingent repayment plan? Yet the government wants you to fill out an application before you know what you’re applying for.

If you want some objective definitions, Andres, check out’s report on Federal Loan Repayment Plans. In plain English, you’ll read up on six distinct ways the government tries to help you manage your student loan debt.

Then I’d call a professional. Much like accountants can help you file income taxes, those Internet search results are from companies that want you to pay them a small fee to help you save big bucks.

Once you know the basics, you can navigate that call much wiser. For starters, ask lots of questions and don’t sign up for anything right away. If you get hit with a hard sell, call someone else. If you’re asked to pay up front, hang up.

Of course, you can call and speak to an expert, but if it’s not us, call someone — but only after reading up on the topic. I’m always amazed at how people spend hours researching cars before they buy one, but seldom even minutes researching how to pay off their student loans. What’s damning about that in many cases is this: If you do it right, your research will save more on your student loans than it will on a new car.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched I’m glad you’re here.

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