In today’s economy, many college students graduate with tens of thousands of dollars in student loan debt, and often have trouble making payments due to unemployed or underemployment. However, many Florida residents may be happy to know that there are a number of debt relief solutions that may be available if you have federal student loans.
In general, federal student loans are expected to be paid back within a decade. However, the U.S. government does offer an extended repayment program. To qualify, you have to owe at least $30,000. However, with this type of program, keep in mind that the total amount of interest paid back would be a lot higher than a traditional repayment plan.
Another option that may be available is the graduated repayment plan. This allows for just the interest to be paid back for up to the first four years. After that, the payments gradually increase. In the end, the loan is still paid back in 10 years, although the interest paid back is still higher than if you were to just make regular payments over the entire 10 year period.
There is also a special income-based repayment program that would allow you to pay back what is affordable based on how much you earn. Typically, the amount won’t be more than 10 percent, and after 25 years, whatever is not paid off is forgiven. This is often times great for the graduate who has a profession that financially does not equate to how much the education behind the job cost.
These above mentioned options are also just different ways of repayment; however, deferment and forbearance are also sometimes options for the unemployed.
Of course these are also not the only options, and anyone in debt should look into all debt relief options that may help to pay down what is owed the fastest. For example, if you did not have credit card debt, would it be easier to pay off your student loans? Maybe bankruptcy would be the best choice. Additionally, if you’re a homeowner, maybe a mortgage modification could help you free up some extra money?
In the end, the message to all those who are struggling with crushing student loan debt is to stay calm, as solutions may be available.
Source: Indianapolis Star, “Your Money: Having trouble repaying those student loans? There’s help,” Sandra Black, Oct. 16, 2011