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I have $200K in student loans and haven’t finished my master’s. How can I tackle this debt?

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Question: I have over $200,000 in student loan debt, most of it lent by the federal government, but a month before I finished my masters in public health, I had to withdraw temporarily due to some health issues. My payments are on pause at the moment, but I don’t know what I’ll do when I have to start paying debts. Currently, I work as a therapist for an online counseling provider and make approximately $35,000 annually. I live in Florida, with my ex-boyfriend who is struggling to find work. I know I should finish my master’s, but I’m so tired of being in school, I can barely make it through. I’ve talked to my lender about income-driven repayment plans. They suggested that to start, I could pay $800 a month. My rent is $1250 a month. How am I supposed to live? I have to find a way to pay off the $200,000.

Answer: At first, paying off $200,000 of student loan debt in a profession where you pay a median salary of less than $50,000 seems like an impossible feat. You’re already talking to the lender about an income-driven repayment plan, which is a smart one, and even then, it feels impossible. But there are ways you can address this: We asked professionals what options you and others might like to consider when paying off student loans, from loan forgiveness to income-based payment plans and more.

Struggling to get out of a student loan or other debt? Type chill@marketwatch.com.

In your case, one option to consider is whether you qualify for student loan forgiveness, says student loan expert Mark Kantrowitz, author of multiple books including Who graduates from college? Who doesn’t?. Many full-time government and nonprofit jobs may qualify for loan forgiveness, and some health care professions may also qualify (see list of occupations with loan forgiveness here). After 10 years of payments in an income-driven repayment plan during Working full-time in an eligible public service job, remaining debt will be forgiven, tax-free.” Consider applying for such positions while completing your master’s degree.

Kantrowitz also notes that finishing your degree will statistically make you more likely to pay it off. “This last part of the marathon is the most difficult,” says Anna Helhosky, student loan expert at NerdWallet. “But completing a degree is what makes getting all the debt worth it.” And when you do, you’ll want to find well-paying work (and/or balance jobs with loan forgiveness), and think of other ways you can increase your income so you can tackle your debt.

At this point, you might be thinking: Ah, I can’t just pay off my debts in bankruptcy (answer: it’s possible, but it’s very hard to do), and what happens if I default on loans? If you default, the entire outstanding balance of your loan will become due immediately, and your salary may be withheld, among other penalties. While refinancing may be an option for some since rates are very low right now – see the lowest rates you can qualify for here – in your case, you’ll likely want to stay on an income-based payment plan (federal student loan refinancing can That strips you of it (these types of payment plans). For the loans you have that are private student loans, refinancing may make sense. This guide will help you find out if refinancing is right for you.

So a better option might be a solution, finish those final semesters, graduate, and then find a steady job at a well-paying job where you can get at least a portion of your loans. There may not be a fairy godmother who will pay off your debts in full, but the future is not entirely bleak.

* Edit messages for clarity and brevity.


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