Info about Student Loans
Options for Dealing with Student Loans Outside of Bankruptcy
While student loans tend to come with lower rates than other types of loans, they can prove daunting. The student loan re-payment process begins right after you complete college, and will likely start before you have secured employment. In a difficult economy, it’s particularly easy to fall behind on student loan payments. Beyond declaring bankruptcy, there are some ways to deal with student loans.
Re-Negotiate Payment Terms
If your lender will allow it, you can re-negotiate the terms of payment. In doing this, you will likely have to accept a higher interest rate. However, you will be able to re-pay the loan over a longer amount of time, allowing for lower monthly payments. Some lenders may allow you to re-negotiate without re-financing, but you may have to re-finance to do this, incurring a few additional fees.
Work for an Employer That Repays Student Loans
If you’re interested in teaching or have a degree in teaching, investigate potential employers that repay student loans of employees. These employers include Teach for America, Americorps, and designated school districts in low-income areas. Other employers can also help you advance in your career while offering repayment, including the United States Armed Forces and government-run social services. If you join the Peace Corps, you can qualify for a significant reduction in the amount owed.
Profession-specific opportunities also exist—if you do pro bono work through various organizations as a lawyer or donate your medical services to the National Health Service Corps, you can earn a reduction or partial forgiveness on your loans.
Consolidate Student Loan Debt
You may have several different types of student loan debt. This is especially relevant if you’ve accepted funding from multiple sources or if you skipped a semester and missed the opportunity to receive continuous funding. If you transferred during your college career, you may also have multiple loans. Consult with a bank lender about consolidating multiple student loan debts into one manageable monthly payment.
Income-Based Payment
Particularly helpful for recent grads is the income-based payment. This type of loan agreement binds you to pay off the loan in a certain amount of time while allowing monthly payments to be based upon your income. This is perfect if you make your living off of commission or are currently employed as a temporary worker. If you have a steady job but expect to earn more through the years, consider a graduated payment option (in which the repayment amount gradually increases). To obtain these, your lender must be willing to work with you and you must be honest with your lender about your financial difficulties.
Forbearance
Forbearance gives you a few months to catch up. You can ask to delay payment for three months, but must provide a valid reason and will be unable to do this multiple times.
If you have already exhausted for these options or find that they don’t qualify, consider speaking with a Minneapolis bankruptcy attorney. A Minneapolis bankruptcy lawyer can assist you with filing for bankruptcy.