You have finally conquered the university and survived four years of intensive study to get your degree. Graduating is a liberating experience until you have received your first student loan. Unfortunately, student loans go back immediately on the day you graduate, whether you have your dream job or not. Currently, many graduates are confronted with the reality that they simply cannot pay their monthly payments for student loans. It can be a debilitating crisis time when you cannot pay your monthly student loan, but there are options available that will keep you financially up and running.
Do not Go Into Default
Do not assume that you must stop paying because you cannot pay your student loan. The default on your loan is one of the worst things you can do, and it makes paying off your loan even more difficult. Lawyer, Daniel Gamez, of the Gamez law firm says: “As soon as a federal student loan is in default, borrowers are confronted with potential wage attachments of up to 15% of their wages.”
Remember that bankruptcy is not an option. Declaring bankruptcy will not get rid of your student Frankenstein loan, and it will place you in a terrible financial situation that will affect your job choices, housing choices, and credit score for the next seven to ten years. (For more, see The 6 Worst Student Loans You Can Make .)
Consider delay or tolerance
If you cannot afford to pay for your student loan, you may still be eligible for deferment or forbearance. For deferment you are not obliged to pay payments during the period that you receive deferment. The government will even pay the interest on subsidized loans. However, if you have an unsubsidized loan or a PLUS loan, you are still responsible for paying back the current interest. That is why it is best to request a deferment of subsidized loans before you defer your other loans.
Procrastination is available for the following people:
- People returning to a college or to a career training at least part-time
- Persons who actively serve in the army
- People with economic problems <People who have become unemployed or have problems finding a job
- Persons who have returned from active military duty
- Tolerance is another option available to individuals who cannot make their monthly payment. Tolerance is discretionary (to be approved by the lender) or mandatory for the following persons:
Persons with financial problems
- Persons who deal with illness
- Persons who serve in dental or medical internships
- Persons eligible for the teacher loan forgiveness
- Remember that deferment and forbearance do not happen automatically. Do not forget that your student loan will be placed in these statuses when you stop paying. You must first contact your lender and be the first to be approved. It is important that you do not stop paying your monthly payments until you are told to do so.
Look at income-driven plans
Another option for graduates are special income-related plans that are awarded through the lender. There are three programs to watch:
Income-dependent repayment plan (IBR plan)
- Pay if you earn a repayment plan (Plan for Pay As You Earn)
- Income-dependent repayment plan (ICR plan) All three of these plans have eligibility requirements, but if you are qualified, your monthly student loans can be reduced to a maximum of 10% of your discretionary income. Most of these plans will never cost you more than the ten-year Standard Repayment Plan amount.
- There are opportunities for private student loans
Private student loans are not eligible for forgiveness programs or income-driven plans. There is much less flexibility when it comes to private student loans, but there are still options. Some private lenders offer renewals and protection against unemployment, which gives you a temporary break during your repayment. It is best to call the lender immediately if you know you are late for a payment or are missing a payment.
It is also a good idea to consolidate your private student Frankenstein in one loan with a lower interest rate. This reduces your overall monthly payments and can also help you avoid missed payments if you have problems combining multiple loans. Often a private loan comes with a variable interest rate, so it is smart to have it consolidated into a fixed interest rate, which will protect your monthly loan costs in the future. Do not consolidate your subsidized or non-subsidized student loans if you want to apply for government programs for payment or forgiveness.
Finally, there is another option for private student loans: negotiation. Lawyer, Daniel Gamez, says: “I have learned that lenders tend to treat private loans to student Frankish loans like any other unsecured debt (such as credit card debt). This is a good thing because it usually means that the lenders will consider themselves settle for less than when it means that they get something refunded, even with a discount and over time. “Gamez continues to say that most creditors would rather settle with you than they have to answer to court. (See for more
5 Surprise changes in the student Frankinening program
.) You are eligible for cancellation and cancellation In special circumstances, your student loan can be completely canceled or canceled. A loan can be canceled or forgiven for one of the following situations:
Closed school dismissal
- Passing away
- Teacher’s Loan Forgiveness
- Public service Forgiveness
- Bounce back from standard If you have defaulted on your loan, it is best to have a conversation with the lender. Ask for rehabilitation programs to see if there is one available for your situation. In some cases, the lender may still be willing to work with you, as long as you meet their requirements. It does not matter what your financial situation is, it is best not to ignore your loans. Try to cheer yourself up again, whether you have missed a payment or if you have not received any payments for a year.
- The bottom line
One of the smartest things you can do after you graduate is to take care of your student loans. Your loans won’t disappear no matter how many payments you miss or if you file for bankruptcy, so it’s best to give them a good reputation. Get help at the first moment of financial trouble to prevent your loans from being delayed.