Student Loan Payment? There Are Solutions.

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Student loan payment options are there for anyone to read, study and determine which fits the best for the particular situation. It is sad that nowadays students may find themselves with a $120,000 college degree and no job. But this bitter truth won't stop the bills from coming.

I know students want to settle their debt but it is difficult when in this challenging economic time, it is not easy to find a job. Even those who graduated earlier are struggling. And now the monthly statements are arriving regularly. Let us therefore look at the student loan payment options.

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One option in this tight financial situation is forbearance or deferment. This will allow the students to postpone payment under some circumstances. There will be ramification but this repercussion is not as bad as if you made late payments consistently or if you default on the loan. Instead, here's what you need to do.

Find out if you are eligible for the forbearance or deferment. First of all, let us see what this is all about. Forbearance or deferment is that period when loan payments are not required. Don't let this make you feel like celebrating because the interest without making the student loan payment will continue to accrue. So what's the difference between forbearance and deferment?

The difference is that deferment is used in particular or specific circumstances with federal loans. You know the drill on this one. One does not have to make a student loan payment when one joins the military or enrolls in graduate school.

But don't let the above make you feel bad because deferment can also be used for economic hardship or unemployment. If you get public assistance, you are automatically eligible for deferment. Otherwise you either have to be unemployed or not earning more than $16,245 annually.

Now let's discuss forbearance. If you are not eligible for deferment, you can still postpone the student loan payment. And they call this forbearance. How? If you have some health issues and are in other tight situations, then this is what you can get from private lenders who may grant you some form of postponement.

The lender has the sole discretion to grant forbearance. The largest lending company is Sallie Mae and they have agents who interview the borrowers to determine whether or not to grant forbearance. They seem to be granting less of this though because the track record is that the percentage for forbearance has gone down from 13% to 6.5%.

The next question is how long will this last? Well, it is only granted one year at a time if the cause is economic deferment. If it is due to unemployment, then it is granted in increments of six months. Then you can apply again for a total of three years for economic forbearance and three years for unemployment deferment. And they do not have to be continuous.

Are there disadvantages? Because the interest continues to accrue, this option should really be used as a last resort. One way to get around this is to pay the interest during the period of forbearance and deferment. Mind you, if you're on a subsidized federal loan, the interest is paid by the government while you're in school and if you're on deferment. But it won't pick up the cost for forbearance.

Knowing the disadvantages of forbearance and deferment will make one want to see the other options that are available especially with President Obama's recommendation to make it more affordable but you will have to see the next page as I am getting more words than I am supposed to do for student loan payment.

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Student Loan Payment, What To Do When You Can't Pay Student loan payment is a huge problem that a lot are faced with so you are not alone. For help on federal loans, you can contact http://www.myfedloan.org/about/contact.shtml. For those other than federal loans, you will have to contact the servicer of your loan. The name of this servicer is in your bill. There you can find the details on how they can help prevent default.




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