There’s nothing like getting approved for grants and scholarships to help navigate your way through college or university. However, if you have applied for loans, you’ll be experiencing the brunt as a borrower as collection agencies and lenders pursue you for repayments. Then, you’ll be in more financial difficulties as before. So if you’re in financial trouble as a student, you need to seek help.
The question is, can you acquire financial aid for paying back your student debt?
In reality, no. There’s no federal financial aid available to help fund student loan repayments.
The federal government and private lenders do provide options to alleviate that financial burden on student loans.
Here are options that students can avail to help them with their financial needs.
One basic option is student loan consolidation, where you could make simpler your repayment schedules. If you can obtain lower interest rates than your school loan payments, then you can spare yourself some cash. If the loan consolidation covers the duration of your student loan repayment terms, then you may benefit from monthly payment reductions now when you are still struggling as an entry level employee and aren’t making a huge income yet. You can always grow your payments as your salary increases.
Stafford loans provide rescheduling of payments, however, take heed that some private lenders do not. They are usually contracted for unemployment or other economic privations, or if you are still studying.
During deferment, student borrowers can either pay the interest only, or they can capitalize the interest by complementing their entire debt and paying interest on the interest following the deferment period.
For student borrowers who have subsidized loans, the federal government pays the interest during the deferment. If your loans have been subsidized federal loans based on need, you can receive this type of assistance if you have difficulty with your loan repayment.
Usually, forbearances may last up to 12 months, but in some cases lenders do not permit them due to severe circumstances. This would also result in interest accumulating in every case.
Try to avoid defaulting on a student loan. You might lose access to emergency financial aid or other social security services, your tax returns can be withheld, your wages can be pending and your professional position can be revoked or suspended.
If you’re at risk of defaulting, you can consolidate your loan either through the U.S. Department of Education or a private lender of your choice.
The student loan consolidation process is the only way to minimize the amount you pay with help from the federal government. If your debts are consolidated, there are actually various plans available for your utilization that enables you to pay your debts and loans in a way that’s suitable to your economic or social situation. You can change your plans if your situation changes over time.
You can also avail of income-based plans. These plans will have your salary taken into consideration, as well as your family size and expenses. It will also address if you are disadvantaged enough to not be able to pay back your loans. The problem with this plan is that in order to get out of your debts, you have to remain impoverished for most of your life.
