Erasing student loan debt after college graduation has been a difficult task for many individuals as the costs of college have been on the rise and necessitated that students turn to options from federal and private student loans. Sadly, some students have primarily paid for their college through student loans, which for some may have been necessary, but there is a great deal of concern when it comes to repaying student loan debt as many graduates are not entering into a job which will allow them to meet their monthly payment requirements on their debt, and for others, no job has been found after graduation.
Problems paying student loan debt often center around the monthly payment obligations which students must meet. There are cases where college graduates have simply been unable to meet their monthly payment on their debt obligation due to either a high amount of student loan debt or, again, employment opportunities which could not afford them the ability to meet these requirements.
Many people argue that if a student cannot find financial assistance through scholarships and grants, to a point where student loan borrowing can be kept in an affordable range, alternative options must be sought out. Simply put, there are those who feel that students who cannot meet their college costs without requiring an excessive amount of student loan debt should either delay their entry into college or seek out as much funding from scholarships and grants as possible. While there are arguments that some students simply cannot qualify for scholarships or federal grants, there are a wide variety of free financial aid opportunities of which many students are unaware.
However, students who are having trouble making their payments on their debt may be particularly having difficulty related to private loans. Private student loans are not necessarily more costly than a federal student loan, but federal student loans can often be more affordable as they do come with low interest rates for many who borrow and there are options like income-based repayment plans, student loan forgiveness, and forbearance options which can be helpful for cash-strapped graduates.
Some financial counselors have suggested, for students who are having difficulty making private student loan repayments, contacting their student loan lender to inquire about repayment assistance, which may be offered in a similar fashion to federal student loans. As an example, the new income-based repayment plan on federal student loans will only require that a graduate make payments toward their loan based on a certain percentage of their monthly income. Essentially, a graduate who has a small amount of income will get lower monthly payments on their federal student loan debt obligation.
However, these repayment assistance plans, or student loan term extensions, may cause the overall costs of student loan debt to rise, and obviously, cost a graduate much more over time. This is another factor which advisers feel students should consider, as acquiring debt through student loans may be easy, and even if repayment plans are affordable, they may come at a high cost which could cause financial strain in the lives of a student borrower for years down the road.