Student Loan Debt

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So you have graduated college and now you are getting those nasty letters in the mail letting you know what your four years is going to cost you a month.  What can you do?  Well if you have multiple loans from different banks you can consolidate into one monthly payment.  However, in most instances when you consolidate the reason your payment goes down is because the number of months you are going to have to pay on that debt goes up. I all depends on your financial situation as to how you want to go about paying for your loans.

Some individuals have a lot of student loan debt and didnt even graduate with a degree.  A smart thing to do would be to continue to take 6 credit hours a semester so that your loans go into deferment and while you are finishing up your degree you can still pay on the loans what you can.

If you are haveing financial hardship you can apply for an economic forbearance in which your lender will decide how long they will allow you to not make any payments.  But interest will still accrue on your loans and there is usually a fee of around $50 for the forbearance.

As stated earlier if you are in school at least half-time most lenders will put your loans into deferment.  You wont have to pay a dime but interest will continue to accrue.

You can apply for a “graduated repayment plan” which will make your monthly payments very low initially and will increase as the months go on.

There are repayment plans known as “income sensitive repayment.”  With this option your lender will take into account how much you make a month and only make you pay a percentage of your monthly salary.

Some of you may be asking if there is anyway to get your debt completely wiped away.  Some states offer loan forgiveness for things such as social work, law, and teachers.  Also if you have a disability you may be eligible.  Some places like the military and Peace Corps will pay for some or all of your loans but we all know that will require a commitment to them.  However unlike most things, filing for bankruptcy will not wipe away student loan debt.  If you are thinking about just not paying your loans, not only will your credit be hurt badly, but your lender could legally get money taken out of your paycheck every month and it will me much more costly to you than if you were to just pay you monthly payments.

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