Student loan debt has become a major problem for many graduates and have required that affordable repayment plans be offered due to the fact that there are increases in the overall amount of student loan debt that graduates are seeing and, obviously, this can lead to financial stress in the personal lives of these individuals and increases in default rates after students have left school. While there are factors like a slow recovery in the job market that may have led to some students being unable to repay their student loan debts, there are options available to graduates that may help them not only find more affordability in their monthly payment but erase their student loan debt without fear of defaulting.
According to an article on Today.com, student loan debt is expected to hit $1 trillion this year, which according to data from 2010, was the leading debt that many Americans carried as this number surpassed even credit card debt for consumers. Since many individuals are in a difficult financial position related to their credit cards, this revelation that student loans are now more burdensome for Americans than credit card debt poses a potential problem if defaults in the area of student loans continue.
It was also stated on NYTimes.com that, “Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993. Last year, graduates who took out loans left college with an average of $24,000 in debt.” Sadly, this problem of student loan debt could become a bigger issue for many as there have been cuts in funding to various universities, as well as, cuts in some forms of financial aid and increases in tuition, all of which could lead to more students being in a position where they need loans to simply pay for their education.
However, those who are in a difficult financial position with their student loan debt may have repayment options that will bring about affordability and help these men and women avoid missing payments on this form of debt. As an example, federal student loans offer a great deal of assistance options when it comes to repaying these loans as a student who may have multiple federal loan obligations can opt for a student loan consolidation plan, may qualify for an income-based repayment program that will only require them to meet payments on their debt in an amount related to their income, or there are some options that students may use like forbearance plans that will allow students to forgo making payments for a set period of time until they can begin making repayments.
Also, there have been indications that private student loans, which have been less popular than federal loans, are offering similar repayment assistance plans for students who may be in a difficult financial position after graduation. However, there are some advisers who counsel students to avoid private student loans as there are, again, options from federal programs that will not only offer repayment assistance but may also allow for student loan forgiveness if certain qualifications are met.
Understandably, some students may have to turn to loans as a way to meet their college tuition costs, but if students have sought out as much free financing as possible through scholarships and grants, or borrow only the minimum amount needed to meet costs will not only help keep student loan debt down, but can make repayment much easier after graduation. However, students are still being prompted to talk with counselors in their college’s financial aid office about opportunities to avoid borrowing loans, even if they have not currently found the funding that will help them pay for their education.