Student Loan Grace Periods End
The grace period on student loans to those who graduated last May has ended and it's time to start paying them back. That's ok if you have landed a job that actually pays you enough money to live on, but what about those who either haven't found a job or your pay isn't adequate to subsist on?
You do have a few choices, but one of them is NOT burying your head in the sand and ignoring the situation. That will only put you into default, hurt your credit rating (not a good idea for anyone, but especially someone just starting out) and possibly lead to legal action. Get in touch with your lender and explain your situation.
One possibility is student loan deferment. This is a temporary suspension of loan payments for various reasons including reenrollment in school, unemployment, or economic hardship. For your subsidized loans, you won't need to pay interest while the deferment is in place. For non-subsidized loans, you are responsible for the interest added during your deferment. If you are unable to pay it, your loan will be recapitalized and the interest added into the total you owe.
Even if you aren't eligible for deferment, you may be able to use forbearance which is a temporary postponement or reduction of payments for a period of time because you are experiencing financial difficulty. Forbearance may be granted by your lender for 12 months at a time up to a maximum of three years.
Student loan forgiveness may be possible in exchange for service in various organizations such as Peace Corps, VISTA, Military Service and also by agreeing to teach in certain underprivileged or low income areas as defined by the Department of Education.
Bankruptcy is probably not a very good option. Not only will it hinder you going forward since it remains on your credit reports for years, but the student loans are not usually discharged in a bankruptcy and you will still end up owing the loans.
Bottom line...if you are having trouble paying your student loans, talk to your lender as soon as possible. Don't wait until you are already months in arrears.
Technorati Tags: College Loans Financial AidPaying for College Ensuring Continued Access to Student Loans Act of 2008 Stafford Loans
The grace period on student loans to those who graduated last May has ended and it's time to start paying them back. That's ok if you have landed a job that actually pays you enough money to live on, but what about those who either haven't found a job or your pay isn't adequate to subsist on?
You do have a few choices, but one of them is NOT burying your head in the sand and ignoring the situation. That will only put you into default, hurt your credit rating (not a good idea for anyone, but especially someone just starting out) and possibly lead to legal action. Get in touch with your lender and explain your situation.
One possibility is student loan deferment. This is a temporary suspension of loan payments for various reasons including reenrollment in school, unemployment, or economic hardship. For your subsidized loans, you won't need to pay interest while the deferment is in place. For non-subsidized loans, you are responsible for the interest added during your deferment. If you are unable to pay it, your loan will be recapitalized and the interest added into the total you owe.
Even if you aren't eligible for deferment, you may be able to use forbearance which is a temporary postponement or reduction of payments for a period of time because you are experiencing financial difficulty. Forbearance may be granted by your lender for 12 months at a time up to a maximum of three years.
Student loan forgiveness may be possible in exchange for service in various organizations such as Peace Corps, VISTA, Military Service and also by agreeing to teach in certain underprivileged or low income areas as defined by the Department of Education.
Bankruptcy is probably not a very good option. Not only will it hinder you going forward since it remains on your credit reports for years, but the student loans are not usually discharged in a bankruptcy and you will still end up owing the loans.
Bottom line...if you are having trouble paying your student loans, talk to your lender as soon as possible. Don't wait until you are already months in arrears.
Technorati Tags: College Loans Financial AidPaying for College Ensuring Continued Access to Student Loans Act of 2008 Stafford Loans
Labels: college loans, eliminate student loans, financial aid, paying for college, plus loans, stafford loans, student consolidation loan, student loans
posted by Ken MacKenzie at
10:39 AM
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