As of late more college graduates have learned that a college degree and education do not automatically guarantee one a job upon leaving a college or university. While there have been some lucky college graduates who have been able to find employment despite a rough job market, there are still numerous college graduates who are either unemployed or underemployed but face the requirement of repaying college loan debt.
However, there are certain types of college debt that do come with options like forbearance opportunities on repayment, if a graduate is in a particular situation. Unemployment forbearance plans can be common on types of debt, like federal student loans, which necessitate a student began making repayment after a grace period has ended or upon graduation.
Obviously, numerous college graduates have not wanted to default on their college loans and do damage to their credit history early in life, but in some cases, meeting the monthly payment requirement of college loan debt has simply been impossible. While there are alternatives, like consolidation loans or income-based repayment plans, which have helped some graduates in particular situations, these forbearance opportunities do allow graduates who qualify to forgo making payments on their federal student loan debt, or other forms of college loans that offer these programs.
Yet, financial aid counselors often advise graduates who are considering college loan forbearance plans to make sure that this option will be right for their situation. Certain types of college debt will continue to build interest despite being in a period of forbearance, which may also attach interest to the principal amount after a certain amount of time.
While some college graduates have been unable to avoid excessive costs in cases where interest continues to accrue despite being in a forbearance plan, obviously, graduates who have no income or are severely underemployed may have to choose a plan which could cause their overall costs arise, but will allow them to avoid defaulting or delinquency at the present time. Again, each student’s financial situation will be different, so this is an area where many have simply turned to their student loan lender to weigh options for their particular debt predicament.