Repaying Student Loans

The global economy is still on a downturn, and as the recession drags on, it is becoming incredibly hard for people to repay their loans. Students in particular are especially being hit hard. Rising college costs have forced more than half of all college students to take loans, and now, with high rates of unemployment, low-paying jobs and cutbacks in loan forgiveness programs, repaying student loans has become a seemingly impossible task. Repaying student loan is especially hard for students who have obtained funds from private donors, as repayment is required immediately after graduating and there are lesser options for deferment. Federal loans, on the other hand, allow the repayment time to be extended and also offer modification and other options to provide some relief from the financial burden.

However, repaying student loans does not have to be that hard. Many students struggle with how to repay student loans. In order to repay student loans and become debt-free as soon as possible, there are a few simple steps you should follow. The first and most important thing you should do is get organized. Having all your paperwork properly arranged with the lender, dates of borrowing and starting repayments, and the total amount of the loan clearly marked. You should also do your best to make payments on time, as there are financial incentives for this, including a deduction of up to $2500 on the total amount you owe. You can also accelerate repayment – there are no penalties, and in most cases, some of the amount you owe will be reduced.
If you are running out of ways to repay student loans, you should consider talking to your lender to see if you are eligible for forbearance or deferment of payments. You can also apply to consolidate student loans, meaning that you can combine all the loans from various lenders into one loan from a single lender. This automatically extends the repayment period and results in a lower monthly payment. If conditions are especially hard, you can defer payment for three to five years by applying for economic hardship deferment and forbearance.

Frequently Asked Question(s)

Q:While reading on the methods of repaying college loans, I wondered if grandparents can apply for Federal PLUS Loans?

A:Federal PLUS Loans are also known as Parent PLUS Loans. As the name clearly suggests, these loans are totally restricted to parents or the legal guardians of dependent students of undergraduate studies. If you are also the guardian then you may apply for it. Otherwise, you can be entitled as a cosigner along with the parent or legal guardian.

Q:What will happen if I don’t repay college loans?

A:Students who fail to repay college loans can face a number of issues. Bad credit rating can result in the student's ability to get any further loans. This can remain on the student's credit report for a long time and during this time students will not be able to apply for extra credit, loans, mortgage or any kind of financial assistance. It is recommended that students pay every dollar back in order to avoid this situation.

Q:While going through the student loan repayments, there was mention of the course on Introduction to Computers. What are the contents of this course?

A:It is common to get to read about the course on Introduction to Computers while going through the Student Loan Repayments. This course usually is of around 3 credits in total. It is structured to provide students with ample understanding of the basic computer literacy and how to manage the most essential of applications of a computer system.

Q:What are income based repayment student loans?

A:Income based repayment is actually the alternate of income sensitive repayment (ISR) and income contingent repayment (ICR). Income based repayment plans are for students who are stuck in low paying jobs or have chosen careers which are fulfilling but not financially. The way this plans helps such students is by capping their monthly payments at a certain percentage of the students discretionary income, which is according to their income and family size, and not the loaned amount.

Q:Can consolidation help repaying student loans?

A:Yes, consolidation can help with the repayment of student loans. This option is extremely helpful for those who have taken more than one student loans. Consolidation will combine all the payments on each loan to form one payoff plan. The interest rate is also lower on consolidated loans. Payments can also be extended to minimize payments and increase affordability.

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