College loans cannot be discharged through bankruptcy, so debtors must find a way to maintain payments. Defaulting on education loans adversely affects credit scores and will be reflected on credit reports for seven years. In order to maintain good credit, students must pay loan payments on time and in full until the education debt is paid in full.

Graduates experiencing extreme financial hardship might be allowed to restructure student loans by filing Chapter 13 bankruptcy. Debtors should consult with a bankruptcy lawyer to determine if they qualify for this financial provision. Filing bankruptcy to restructure student debt should only be used as a last resort.