By Carol Cummings
Debt from student loans has almost reached epidemic levels. These loans may be expensive, which could be draining. Many American youth are too afraid to even make their monthly student loan payments. Due to the tremendous balance that appears to be stationary, it could seem impossible to handle.
Being young makes you impressionable. Millennials today are hardly an exception. They view accumulating student loan debt as a necessary burden for advancing in their jobs. Many graduates who find employment after graduation. Nevertheless, about half of college graduates in 2014 were working in positions that did not call for a college degree, according to CareerBuilder.com.
After graduation, student debt lenders start harassing their “customers” to make matters worse. If you are one of these clients, you already know that getting into debt is the easiest thing in the world. It's unlikely that you will have enough money to pay off your school loans so fast.
These impressionable, young individuals are made to believe a college education will ensure a job before they even graduate from high school. It turns out that it is not that easy. Only 27% of college grads had jobs relating to their majors in 2013, according to data from Jaison Abel and Richard Dietz of the Federal Reserve Bank of New York, according to The Washington Post. I'm sorry if this is a rude awakening for you. Your student loan debt cannot be eliminated and your ideal career cannot be achieved in one easy step. However, it is achievable and requires action and commitment.
Student loan debt. Don't worry if reading those two words makes you angry. It ought to. Even while paying off student loans may feel difficult, there are things you can do to help. Understanding the type of debt you have is the first thing you should do. Some loans qualify for specific advantages that can help your circumstances.
Observe the National Student Loan Data System (NSLD). The database for student aid maintained by the US Department of Education can be found on this website. This financial aid is only available for federal student loans. In my experience, I've spoken with more people who had federal loans than private ones.
Deferment or forbearance is a smart move for folks who are unemployed or “between employment.” You can temporarily cease making payments on your federal student loans or temporarily lower them with a deferment or forbearance. If you are in risk of going into default on your loan, this could be useful. When your regular monthly payments are missed for an extended period of time, a default occurs. In the event of a default, the lender will take legal action to recover their funds.
The federal government may cover the interest on your loans throughout the deferment term if you are qualified for it. Forbearance works the other way around. You might be eligible to reduce or stop making payments during a forbearance for a period of up to 12 months.
With these choices, you'll have more freedom to pursue the career you've been working so hard to get.
Other choices are available to assist in bringing your monthly payments down to a tolerable amount. For borrowers of direct loans or loans from the Federal Family Education Loan (FFEL) Program, there are income-based repayment options available. Your monthly payments under an income-based repayment plan could be cut to 10% of your take-home salary. In most situations, these programs have a 25-year loan forgiveness period.
There might be a repayment strategy out there that works best for you, depending on your circumstances. Look through the payment plan listings on the Federal Student Aid website.
For those who have many student loans, consolidation is a possible alternative. You should choose a Direct Consolidation Loan if the interest rates on your student loans fluctuate and there are low minimum payments due each month. Direct consolidation loans consolidate several federal student loans into a single loan with a single payment and interest rate, much like traditional consolidation does. These loans might lengthen the loan's repayment period, which lowers your monthly cost. Additionally, rather than having to cope with changeable interest rates, you will receive a set rate.
Certainly, there are drawbacks to consolidation. Although the monthly payments can be more convenient, the interest rate will cause you to pay more over time. You will also forfeit any benefits that your individual loans may have had.
You might not have anticipated having to deal with student debt when you graduated from high school. When most people leave college, it seems to sneak up on them. There are programs available to assist you manage your student debt, no matter the situation. Instead of stressing about monthly expenses, you should concentrate on the future and work for your professional objectives.
It's challenging to manage student loans. You wouldn't believe it, but there are services offered by the government and other organizations that could simplify your payments.