Since many recent graduates may soon find that their grace period expires and the repayment of their student loan debts will begin, which has led some to begin researching opportunities for student loan forgiveness, debt consolidation loans for their student loans, or programs that may make student loan repayment more affordable so that these graduates, some of whom may not have found the income that will allow them to pay this debt easily, will not begin missing payments or potentially default. Obviously, students who are in a position where they owe federal loans may have more options when it comes to assistance plans, speaking with a private student loan lender about debt repayment options, forbearance opportunities, or consolidation loans may help when it comes to students who are in a position where their college loan obligation is simply too much to handle at the present time.
However, students who have federal loans but are currently unemployed may have opportunities for student loan debt forbearance as federal loans can allow certain borrowers as long as three years to participate in a forbearance program, when financial hardship is unavailable. While some students will have to have certain types of loans or be in a specific type of repayment program, many federal options do offer a variety of assistance plans that can be beneficial when a student cannot pay what they owe, but affordable payments on a monthly basis or the forbearance of payments can be beneficial for graduates who will soon be in a position where they must start making payments on these loans.
Yet, when it comes to opting into a forbearance program, graduates must remember that there are some drawbacks to this plan as, in some cases, student loans that do offer forbearance opportunities may still a accrue interest during a forbearance period and when a graduate begins repaying their debt, this interest may be added to their principle. Obviously, this could be a setback for students who are having to pay a higher principle as a result of forbearance, and will likely lead to higher overall costs if a student only meets minimum payments on this debt.
It is frustrating for some students who, while in a period of forbearance will be making interest payments in the hopes of avoiding this problem, as they will be doing nothing to reduce the amount of principle they owe, but it can help when students are struggling financially as, once again, defaulting on federal student loan debts can have numerous negative impacts in the financial life of a graduate for years down the road. Luckily though, certain types of loans, like these federal loans and some private lenders, will allow for students to work out a more affordable payment strategy, participate in unemployment forbearance option, and hopefully avoid problems related to repaying what they owe while students ride out a difficult time in the job market and hope that their income situation and their overall financial life will improve to the point where combating these debts will not be as difficult.