Get Help Paying your Student Loans and Debts
There are several programs funded by the government as well as non-government programs that work to assist college students in paying back their student loans. We have compiled a comprehensive guide that will help you understand how you can benefit from these programs. Each year a new repayment program gets introduced with new and revised regulations; the latest being “Income-based repayment”. Recently introduced by the federal government and based on the borrowers monthly income, this program allocates a percentage of said income to minimizing the total debt.
The Dangers of Defaulting on Student Loans
- In the future, no other forms of financial aid will be available to you.
- Collection costs will be charged on top of the monthly repayment, along with an additional fees that can be as high as 19.5%
- You won’t receive income tax refunds
- Your employer will be directly contacted by the government and will be legally ordered to give 15% of your income to them
- Your defaults will be documented and shown in your records for as long as 7 years
- You may be asked to repay the entire outstanding amount altogether
Repayment Options Offered By the Government
Offer a service – You are given a chance by the US government to get rid of your complete student loan if you decide to offer your services in the following ways:
- Volunteer at some specific charity organizations
- Work at pro-bono firms if you are a law school student
- Work at specified hospitals or clinics if you are a medical student
- Work at specified schools as teachers to get occupational debt relief
Different Available Student Loan Repayment Options
There are various repayment options for borrowers per their comfort level. These include:
- Income based repayment – The most convenient is the income-based repayment that allocates a specific percentage of repayment on the basis of your monthly income and expenses. However, the borrowers are supposed to reapply for this plan every year as it lapses and it can be more costly in the long run.
- Regular scheduled repayment – Similar to a regular schedule of payment that you pay for any kind of loan however, in the case of student loans; there will be a varying rate of interest that you need to check out. The best part of about this repayment plan is that it is somewhat open to flexibility so you may want to ask your lender for modifications to see if they’ll agree.
- Graduated repayment schedule – As per this schedule, your loan repayment may increase when you graduate from a level of a student to a professional. The rate of repayment also graduates accordingly.
With the availability of these options, you may find that one of these fit your financial situation. You may also want to see if your lender will offer you a 25-year repayment plan.
Once you have chosen the best suited plan, you should ideally choose the “direct debit” option to save yourself from later charges, neglectfulness and postage stamps’ costs.
Grant requests. There are several private institutions that have a quota for student grants. These can be grants or scholarships that are awarded to students on the basis of their merit and educational background. If you have a spouse working in the military, you may ask them about cash rewards that are offered by the federal government. These perks are awarded to help military spouses get hassle-free education.
Make sure you’re comfortable with your due date. If you are also paying for your mortgage, auto financing, utility bills, etc. you will have to set a due date for your student loan repayment that fits your available cash flow.
Consolidating the loan. This may help you in lowering down the loan fee in addition to getting an extension on your repayment timeline. However, the loan’s life will be highly extended.
Lower your monthly installments. As mentioned above, you can consolidate the bills and loan amount, which will help in bringing down your installments each month as well as expanding and easing the installment terms.
Consolidation of student loans. If you have only lender to worry about, you will be able to keep it sorted in your mind and schedule your repayments with ease.
Do thorough research and homework. This is your chance to get everything right for the years to come. So do your research on consolidation of loans and on the interest rates of lenders and their plans.
Talk to a consumer counselor. These counselors give students free advice and recommendations on how to save money and reduce debts. It’s recommended to get their recommendations before making a long-term decision.