Student loan debt can be overwhelming. In fact, consider that the average U.S. college student in 2016 had $37,172 in student debt. If you are struggling to pay yours off, and are worried about the effects of defaulting, the good news is that there are some programs that can help. Check out the following options:
Contact Your Lenders about Forbearance or Deferment
While you may want to avoid your lenders when you are falling behind, it will be better to stay in touch with them and let them know about your situation. Many have forbearance of deference programs which allow you to reduce or delay your payments for a period of time. This can help you to get back on your feet without incurring penalties and damaging your credit.
Refinance or Consolidate Your Loans
Another option is to refinance or consolidate your loans. Refinancing is when you get a new lender to give you a loan and use it to pay off your old loan(s). The main goal is to find a better deal on the new loan that you currently have. You can also extend your loan term to lower your monthly payments, although that will end up costing you more in the long term due to the interest. If you can’t qualify for a new loan, you can try to find a cosigner who will help you to qualify. Consolidating your loans is possible if you have federal loans. You combine all of your loans into one to simplify the repayment process.
Federal Student Loan Forgiveness
If your student loans are from the Federal government, there are numerous forgiveness programs you may qualify for. These include:
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- $5,000 Doris Day foundation grant
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- Public Service Loan Forgiveness (PSLF): To qualify for PSLF, you must meet several requirements which include working full-time for a government agency, certain non-profit type, the Americorps, or the Peacecorps.You also need to repay your loan on an income driven repayment plan and need to make 120 qualifying payments. After doing so, the remainder of your student loan debt can be forgiven, tax-free. Learn more here.
- Teacher Loan Forgiveness: You can have up to $17,500 of Direct and Federal Stafford Loans forgiven, whether subsidized or not, if you teach full-time for five consecutive years. You must teach at a low-income school or educational service agency. Further, other qualification must be met. Learn more here.
- Total and Permanent Disability Discharge: If you have become totally and permanently disabled, you may qualify for a discharge of your student loans.
Learn more about federal loan forgiveness, cancellation, and discharge here.
Federal Repayment Plan Options
If you are struggling to pay off your federal loans, you can also apply for a repayment plan. Many options are available including an income-based repayment plan (IBR) which keeps monthly payments at 10 to 15 percent of your discretionary income. The IBR payment plan can be 20 or 25 years depending on when you got your loans and any remaining balance will be forgiven at the end of the plan. Learn more about IBR and the other repayment plans here.
Employer Student Loan Matching Programs
Some employers will help you to pay off your student loans by paying a percentage each year. If you are job hunting, ask potential employers if they offer this benefit. You could also ask your existing employer about this option.
State Student Loan Assistance Programs
Most states also offer student loan forgiveness programs for their residents. For example, in California, you can have your loans forgiven if you are a health professional, dentist, or allopathic or osteopathic physician that meets the eligibility requirements. Check this website to find out about the forgiveness programs in your state.
Student Loan Financial Aid Programs
Lastly, check out these programs that help graduates repay your student debt:
- John R. Justice Student Loan Repayment Program
- NURSE Corps Loan Repayment Program
- NIH National Institute of Mental Health Loan Repayment Benefits
- Iraq-Afghanistan Service Grants
- Contraception and Infertility Research NIH Grants
Student loan debt can be overwhelming but there are many programs that can help you out. Browse the above options to find the best solution for your situation. They may be able to give you the helping hand you need to get back on your feet.
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