Free Article: Student Debt Help

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Help for Student Debt: Six Strategies to Keep Your Head Above Water
By Myles Johnstone

Student loans seem like a wonderful thing when you're in school. It's when you get out of school and have to start repaying them on a beginner's salary that they begin to get hairy. Student loans are notoriously hard to get out of as well. Even a personal bankruptcy won't discharge them. Most types of student loans are forgiven if you die or become permanently and totally disabled, but you probably don't want to go that far to get rid of your debt, do you?

If you're stuck with your student debt, however, help is available. The following six strategies may help you catch up with your payments.

Student Debt Help #1: Loan Consolidation

By the time many students graduate, they've taken out several loans. Instead of struggling to make monthly payments on three, four, or five loans, why not consolidate (i.e., "bundle") them all into one loan with one monthly payment? Speak with your lenders and ask if they have any loan consolidation packages available.

Student Debt Help #2: Change Your Payment Plan to Graduated Repayment

Graduated repayment allows you to make smaller payments at first, as you're entering your professional life and getting established in a career. Over time, as your salary increases, the monthly payment gradually goes up.

Student Debt Help #3: Request Income Sensitive Repayment

If you're out of work, or working for low pay, you can request that the monthly amount you pay on your student loan be based on your income. Since the amount you can afford to pay may only cover the interest, choosing this option means your loan will take longer to pay off in the long run. In the short run, however, income sensitive repayment can help you get through some rough financial times.

Student Debt Help #4: Request Extended Repayment

Most student loans are paid off over a period of ten years. An extended repayment plan will extend the life of the loan to up to 25 years. This will lower your monthly payment, but you may find it tedious to spend the next quarter of a century paying off a loan you took out when you were a student.

Student Debt Help #5: Request a Deferment

If you're in a financial tight spot--being unemployed, being sent overseas for military duty, returning to school--you can request a deferment or a temporary suspension of your loan payments. Depending on the type of loan you've taken out, interest may still continue to accrue.

Student Debt Help #6: Request Forbearance

If you're in a financially difficult situation, you can request forbearance (a period where loan repayment is suspended) for up to one year. During forbearance, interest does continue to accrue. Debtors are encouraged to pay off the interest every quarter, or it will be capitalized and become part of the amount owed on the loan.

Getting your feet under you when you've just finished school isn't always easy, but there are several ways to get help with your student debt until you are better established in your chosen career.

About the Author
Myles Johnstone writes exclusively for finance related sites about such subjects as asset finance and commercial mortgages and other finance solutions.

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