Student loan financial aid debt is a tough fight for anyone just out of college facing a mountain of student loans and wondering how they will ever be paid. With the job market at such a weak point and many wondering if they will even have an income, not to mention enough money to pay back student loan financial aid, many students are wondering what can be done. If there are hardships then forbearance may be the key.
To begin, most of the time you have anywhere from six to nine months to pay back student loan financial aid after you graduate so you don’t have to write a check to your lender as you leave graduation or anything like that.
Like most people, you will have more than one student loan, possibly from more than one lender. If this is the case, look for student loan corporations that will offer you a low interest rate if you consolidate with them.
Now, if you consolidate you have one interest payment so all your student loan financial aid ducks should be in a row. If you can, pay on the interest and wait until your student loan financial aid payments come due to access you situation. If you have a job and can save for six months or so then start making payments and get the student loan out of your life A.S.A.P!
If you are struggling in this almost nonexistent job market we are dealing with at the present, then call your lender, simply explain you are having financial difficulty and since you don’t want to default you need to go into forbearance. Forbearance is a period of forgiveness where you don’t make payments but interest can still pile up.
If you go into forbearance it can be month to month or sometimes up to two years, but it is only a period of time to get on your feet financially. Forbearance is an excellent way to take the stress off having to repay student loans when you have no money, but remember that interest is still coming and a forbearance period can’t last forever.
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Sunday, February 28, 2010
Monday, February 15, 2010
Leniency available on student loans
Federal student loan default rates are on the rise, but there's no need even in this weak economy for you to fall into arrears on your loans.
That's because when it comes to repaying an education loan, no one - except maybe Mom or Dad - is more lenient than your Uncle Sam.
Can't find a job? Or, the one you have barely pays the bills? Maybe you have decided to go back to school to wait out the recession. Whatever the situation, the government has options to provide relief - sometimes for years - from federal loan payments while you get your finances in order. You might even have your loans forgiven over time.
"If students are conscientious about it and they explore their options, there shouldn't be any reason they would be in default, even if they don't have a job," says Mark Lindenmeyer, director of financial aid at Loyola University Maryland.
You run into trouble, though, if you blow off repaying the taxpayers who put you through school. The government comes down hard. Real hard. It might garnishee your wages, apply future tax refunds to the debt, prevent you from renewing a professional license, hit you with interest, late fees and collection costs, and even ding your Social Security benefits in retirement.
The poor job market is blamed for the rising defaults in federal loans. For those in their early 20s - with or without a college degree - the unemployment rate is significantly higher than for their older counterparts. The Bureau of Labor Statistics reports the unemployment rate grew to 16 percent for those age 20 to 24 in November, while the overall unemployment rate dipped slightly to 10 percent.
That's because when it comes to repaying an education loan, no one - except maybe Mom or Dad - is more lenient than your Uncle Sam.
Can't find a job? Or, the one you have barely pays the bills? Maybe you have decided to go back to school to wait out the recession. Whatever the situation, the government has options to provide relief - sometimes for years - from federal loan payments while you get your finances in order. You might even have your loans forgiven over time.
"If students are conscientious about it and they explore their options, there shouldn't be any reason they would be in default, even if they don't have a job," says Mark Lindenmeyer, director of financial aid at Loyola University Maryland.
You run into trouble, though, if you blow off repaying the taxpayers who put you through school. The government comes down hard. Real hard. It might garnishee your wages, apply future tax refunds to the debt, prevent you from renewing a professional license, hit you with interest, late fees and collection costs, and even ding your Social Security benefits in retirement.
The poor job market is blamed for the rising defaults in federal loans. For those in their early 20s - with or without a college degree - the unemployment rate is significantly higher than for their older counterparts. The Bureau of Labor Statistics reports the unemployment rate grew to 16 percent for those age 20 to 24 in November, while the overall unemployment rate dipped slightly to 10 percent.
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