How Gig Economy Workers Can Manage Student Loan Debt

The gig economy is booming as more companies create space for independent workers to take on contract employment on a freelance, short-term basis. Gig workers, as they are called, are a growing self-employed workforce.

Whether a direct impact of the ongoing coronavirus pandemic or a result of disruptions in traditional employment opportunities, self-employed workers of the gig economy increase each year — and millennials lead the way, according to recent research.

The benefits of gig work include flexibility, work variety and even the opportunity to pursue your passion. But an inconsistent work schedule and uneven monthly income and cash flow can be challenges for those managing student loan debt.

[Read: Side Hustles to Help Pay Off Your Student Loans.]

This uncertainty can cause anxiety when it comes to handling monthly bills on top of student loan payments. Depending on your situation, however, there are ways to manage student loan debt while navigating the big picture of your financial life as a gig worker. Here are four tips:

— Ride out monthly ups and downs.

— Sprint ahead of changes to CARES Act relief.

— Understand repayment options most useful to gig workers.

— Look into Public Service Loan Forgiveness.

Ride Out Monthly Ups and Downs

Each person’s gig economy schedule is different. But for those who currently have a steady stream of monthly income, an immediate opportunity is to automate your savings. This type of personal savings plan allows you to automatically deposit a fixed amount, at specified times, into a savings account.

Automated savings can help you prioritize your funds for student loan payments, reducing the temptation to spend that money. This instills a disciplined “set it and forget it” approach to ride out any upcoming monthly cash flow fluctuations.

Sprint Ahead of Changes to CARES Act Relief

If your current portfolio of gig opportunities allows, plan to put money toward your student loan debt to reduce the uncertainty of federal student loan relief in the Coronavirus Aid, Relief, and Economic Security Act.

[Read: How to Pay Off Student Loans.]

The CARES Act temporarily suspended principal and interest payments for most federal student loans through Sept. 30, and President Donald Trump signed a memorandum in August extending the relief through the end of the year. Without an additional extension, student loan payments and interest accrual are set to resume in January. Now is the time to consider setting aside gig contract income as a “savings sprint” to get ready for when student loan payments resume.

Understand Repayment Options Most Useful to Gig Workers

Contact your student loan servicer to explore options for managing student loan debt. To prepare for the conversation, resources like on-demand webinars and websites like can provide you with detailed information.

One recommended option is income-driven repayment plans, which allow qualified borrowers to have a lower monthly payment based on how much money they make and their family size. These plans are designated only for federal student loans and are available through the U.S. Department of Education.

Income-driven repayment plans help alleviate monthly payments, a welcome benefit if you’re navigating slower-than-average monthly gig work. Each plan — such as PAYE or REPAYE, which refer to Pay As You Earn and Revised Pay As You Earn, respectively — generally allocates a percentage of your discretionary income toward eliminating your student loan debt. For gig workers in particular, it is helpful to research each federal student loan repayment plan to find the right fit.

Another option for gig workers who anticipate an uptick in income over time is the extended repayment plan for federal student loans, which allows you to extend repayment to a 25-year period. There’s also the graduated repayment plan, which lowers your monthly payment and then increases the amount you pay every two years.

[Read: What to Know About Federal Student Loan Repayment Options.]

Look Into Public Service Loan Forgiveness

Consider including Public Service Loan Forgiveness with your gig work. Currently, those employed by a U.S. federal, state, local or tribal government — or a qualifying nonprofit or not-for-profit organization — may be eligible for PSLF , along with AmeriCorps and Peace Corps volunteers.

The federal program forgives the remaining balance on your student loan after you make 120 qualifying monthly payments. Gig workers employed in more than one qualifying part-time job at the same time need a combined average of at least 30 hours per week to be eligible for PSLF.

Knowing your student loan repayment options and creating a plan will help you properly adjust your gig economy work, avoid default fees and negative credit reporting, and free up money to ensure a healthy financial future.

More from U.S. News

How to Pay Off Multiple Student Loans

7 Apps That Can Help You Pay Off Student Loans

How to Resolve a Student Loan Dispute

How Gig Economy Workers Can Manage Student Loan Debt originally appeared on

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