Options For Paying Off University and Online College Debt
Post submitted by Jessica Wagner
Everyone tells young adults that education is the key to a good future. This isn’t really an arguable topic. It’s a fact that people with degrees from universities and online colleges have fared much better in this most recent economic storm. Another issue that isn’t talked about with nearly enough frequency is the insurmountable debt that’s usually incurred while paving the way for a better future. A college education is more expensive in America than in almost any other country in the world. Our systems excel in the knowledge they give our bright youth, but the same system falls short of making it affordable. However, there are several things that the average person entering the workforce can do to pay-down their student loans quickly.
One popular misconception among college students is that you can file for bankruptcy and the student loans go away. This is most definitely not true. This debt will follow you for as long as it takes to pay it back. There is no “get out of jail free” card, but there are programs set in place to make this process far less restrictive and burdensome. It’s important to know that you do have options with how and how much you pay back:
Loan Forgiveness Programs
Under the College Cost Reduction and Access Act of 2007, many students have safe haven in the public service sector. This public service loan forgiveness program allows graduates that enter sectors like teaching total freedom from debt after 10 years of full-time service. This is a highly appealing option for those who have hundreds of thousands of dollars of student debt. All you have to do is pay off your balance at regular intervals for ten years and after that point, you’re debt free. The borrower must make a minimum of 120 payments to be eligible, but you have to first consolidate all of your student loans into Direct Lending to quality for this forgiveness program.
If you took out any loans from private institutions, then you’re paying far more than you need to. If this is the case, the first thing you should do is to check up on your credit score. See how good your credit is and, if it’s pretty decent, look at other institutions that have far lower interest rates. This is one of the biggest costs of paying off student debt. You’re likely to pay at least triple the amount of your student debt from just interest rates alone so it’s best to look with other lending institutions that will help you get the best rate possible that will end up saving you tens of thousands of dollars over the life of the repayment process.
Many of the options you’re going to find are predicated on the misconception that you already have a decent job. As we’ve seen, unemployment is high and has left millions of people out of work. The fact is that you have to pay off your loan, and the bills come in like clockwork no less than six months after your graduation date. If you’re on the market for a job, but you haven’t been having any luck, you might quality for a debt deferment. You can apply for an Economic Hardship Deferment for any loans that you took out. This is covered under the Federal Family Education Loan or the Federal Perkins Loan Program. You’re also eligible if you work in the Peace Corp as a volunteer or if your monthly gross income from employment is equal or lessor than the monthly minimum wage.
You have to pay off your loans, and you have several options available when doing so. Not everyone has been so fortunate to find a good job, or even find a job at all. That’s why these programs, and others, are available to the average person so they can make getting an education affordable. If you’re having a tough time getting control over your loans, look at all the ways that you can effectively manage your student loan debt.