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Student loan debt has become an epidemic of sorts. These loans can be overwhelming and ultimately stressful. Many young people in America are too scared to make the monthly payment on student loans. It can seem impossible to deal with because of the overwhelming balance that doesn’t seem to go anywhere.
You are impressionable when you are young. Today’s millennials are no exception. Accumulating student loan debt is viewed as a necessary burden needed to achieve their career. Many find themselves employed after college. However, according to CareerBuilder.com, in 2014 nearly half of college graduates were employed in jobs that do not require a college degree.
To make things worse student loan lenders start haggling their “customers” soon after graduation. If you are one of these customers, you would probably know by now that nothing in this world is easier than debt. The chances of you having the money so quickly to pay off your student loan debt are pretty slim.
Before leaving high school, these young, impressionable people are led to believe that a college education will lead to a guaranteed career. Turns out, it’s not that simple. The Washington Post reported in 2013 that, according to data from Jason Abel and Richard Dietz of the Federal Reserve Bank of New York, only 27% of college graduates had jobs related to their major. I apologize if this comes as a rude awakening for you. There’s no easier way to make your dream job a reality and your student loan debt disappear. However, it takes action, commitment and it is possible.
student loan. If reading those two words makes you angry, don’t worry. Necessary. Paying off student loans can seem impossible, but there are ways you can help yourself. First you need to understand what type of loan you have. Some loans qualify for certain benefits that may help your situation.
Visit the National Student Loan Data System (NSLD). This website is home to the US Department of Education’s database for student aid. Only federal student loans are eligible for this assistance. In my experience I have talked to more individuals with federal loans than private ones.
A good idea for those who are unemployed or have a deferment or forbearance “between jobs”. A deferment or forbearance allows you to temporarily put off your federal student loan payments or temporarily reduce the amount you pay. This can be helpful if you are at risk of defaulting on your loan. Default occurs when you have not made your monthly payments for an extended period of time. In case of default, the lenders take legal action to get their money back.
If you qualify for the deferment, the federal government may pay the interest on your loans during the deferment period. The opposite goes for a tolerance. In a moratorium, you can reduce your payments for up to 12 months or stop making payments altogether.
These options can give you room to breathe and pursue the career you studied so long to achieve.
There are other options available to help you reduce your monthly payments to a manageable level. Direct loans or the Federal Family Education Loan (FFEL) program are income-based repayment plans for people with loans. Your monthly payments can be reduced to as little as 10% of your monthly income in the Income-Based Repayment Program. In most cases, the loan is forgiven in these programs after 25 years.
Depending on your situation, there may be a repayment plan that best suits you. Visit the Federal Student Aid website and browse their list of payment plans.
Student loan consolidation is a viable option for those with more than one student loan. If your student loans have varying interest rates and minimum monthly payments, you should look into a direct consolidation loan. Like traditional consolidation, a direct consolidation loan combines multiple federal student loans into one loan with one payment and interest rate. These loans allow you to extend the time you repay the loan, thus reducing your monthly payments. You will also get a fixed rate on your interest instead of dealing with variable rates.
Consolidation has its pros. You may be more comfortable with monthly payments, but you will end up paying more because of the interest rate. If your personal loans had attached benefits, you will lose them too.
You may not have planned to deal with student loans when you were leaving high school. With most people it starts sneaking up on them right out of college. No matter what your student loan status, there are programs available to help you manage it. You deserve to focus on the future and work towards your career goals instead of worrying about the monthly payments.
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