How to Pay Your Student Loans Without Actually Paying Them

There are two rhetorical positions commonly adopted when addressing the topic of student loans, one held by those with robust monthly incomes, the other championed by magical thinkers whose earning powers border on the anemic. Try to guess which is which:

1) “You shouldn’t have gotten into so much debt in the first place if you didn’t have a responsible plan to pay it off. Quit complaining and get to work.”

2) “Student loans exploit children by luring them with the promise of non-existent careers into borrowing inconceivable sums. The system is broken; defaulting counts as civil disobedience.”

If you’re partial to the first of these arguments, then you should stop reading this immediately and go hang out in your bathtub full of gold-plated caviar (or whatever it is you people do), but if you’re listing toward the latter position, then it only stands to reason that you should get out of your student loan debt as quickly and painlessly as possible. And there are actually ways to do that. Check it out:

(Note: Most of this stuff only works if you have public student loans furnished through the federal government. If you’ve got loans from private lenders, then I’m sorry, but you’re pretty much doomed to wander the earth in ashes and sackcloth. Look me up and I’ll buy you a drink, you poor bastard.)

LIVE SOMEPLACE AWFUL
How bad is it to live in Kansas? It’s so bad that the state will actually pay you 15 grand (or at least pay 15 grand toward your student loan debt) just for agreeing to get your mail there for five uninterrupted years. Fifty counties within the state have designated themselves “Rural Improvement Zones,” which is code for “We have neither money nor people, please help.” Show up to one of these ROZs with diploma in hand to receive the aforementioned debt forgiveness, along with a kindly opportunity to recuse yourself from the state’s income tax. Nebraska has a similar program in the works, so if you wait it out for a minute you might have more locales to choose from, though in both cases you’ll have to weigh the financial benefits against the inevitable pain of discovering just why it is that there’s no one there in the first place.

MAKE ALMOST NO MONEY AT ALL
A “friend” of mine recently discovered that if you apply for Income-Based Repayment on your federal student loans (which you should do in any case, because it’s awesome), you can actually wind up with an income-based monthly payment of nothing. The federal government defines your income-based payment as 15 percent of your discretionary income, which it in turn defines as the difference between your Adjusted Gross Income and 150 percent of the poverty guidelines for your state.

So, if the poverty line for your state is set at the federal standard of $11,170 per year, and you make anything less than $16,755 per year, you can have your monthly student loan payment officially set at $0 per month. Keep this up for 25 years and the government will straight-up cancel your student loan debt. This plan involves being really, really poor for a really, really long time, but for the stubborn and fiscally incompetent, it can’t be beat.

GET A JOB THAT WOULD ALLOW YOU TO PAY BACK YOUR STUDENT LOANS ANYWAY
That special programs exist to help nurses (median yearly income: $65,950) and teachers (median yearly income: $51,380) pay back their student loans makes somewhat less sense than, say, the development of similar programs aimed at baristas and data entry clerks, but there you have it. Should you choose to enter the profession of nursing, such options as the Nursing Education Loan Repayment Program make viable the option of erasing your student debt, provided you’re willing to work in a “Critical Shortage Facility.” Similar programs exist for teachers willing to work in low-income school districts.

Federal Perkins loans offer a reckless orgy of cancellation options along these lines, including loan cancellation for full-time nurses, science teachers, school librarians, and tribal language college professors. Direct and Federal Family Education Loans tend to be more tight-fisted in this regard, but still, if you’re willing to commit to five years of teaching in a school with an armed security presence, or entering the amorphous field of “public service,” you can consider yourself debt-free.

DECLARE FANCY BANKRUPTCY
Common opinion has it that you can’t shirk student loan debt via bankruptcy, but this is only sort of true. If you can prove that payments “will impose an undue hardship on you and your dependents,” some courts will allow you to throw your educational debt onto the fire along with your laughable home mortgage and general credit card shitstorm.

The key here lies in proving that the circumstances currently making you broke as shit are likely to continue unabated. This can be a tall order. Claiming persistent alcoholism can appear at first like a convenient option, but it’s been tried and courts have chucked it out in the past. A more reliable strategy involves having children, getting a crappy job, and insisting that you’ll never be able to make more than the paltry sum you already take home (which, let’s face it, is probably the case already, minus the children part).

Congress has recently held hearings on this subject, so if you wait it out and cross your fingers, the powers that be may loosen the rules far enough for you to make it happen.

JUST DEFAULT AND SEE WHAT HAPPENS
You’ll never again lay hands on a credit card, mortgage, or lease agreement, but for the desperately indebted and socially brass-balled, defaulting on your student loans presents a viable option.

Getting started on this plan is straightforward enough: Just ignore your payments. First, you’ll get letters from your lender politely asking that you pony up the 30/60/90-days past-due lump of cash in question. Pay these no mind, as you will do with all correspondence marked “Sallie Mae.” In fact, develop a habit of ignoring all mail, because it’s about to become one of your principle occupations.

After your loan holder has exhausted its capacity for polite indignation, you’ll start getting menacing letters from a collection agency. Expect these at a rate of two to three per day. Each collection agency has its own special sauce of bureaucratic finger cracking, but whatever your circumstances, pressure will be forthcoming from some unusual sources.

I’ve heard of collection agencies sending financial death threats to the parents of loan holders, debt collectors coming to the doors of unsuspecting defaulters in the guise of Mormon missionaries, and multiple accounts of collections agencies performing a specialized bait-and-switch in which you open the door to a UPS deliveryman expecting to receive something you ordered online, and instead find a demand for more cash.

Things will get uncomfortable, that much is guaranteed, but if you stick it out, there’s really not that much that debt collectors can do. (This is true at least so far as federal loans are concerned; if you’ve got private loans then you’ll probably wind up in court.) Without actually bringing suit, your federal loan holder can start lopping 15 percent off the top of your “disposable pay,” in addition to withholding your income tax refunds, but that’s about as far as they can go.

So, if you’re willing buy all your clothes secondhand and commit to dealing with inhuman amounts of stress, go ahead and default, you fiscally irresponsible renegade.

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