If you're like many people who borrowed money to get through college, you're struggling to repay your student loans. Naturally, recent graduates should expect to tighten their belts for a few years until their earning power increases to the extent that their student loan payments are more manageable, but some are truly experiencing difficulties making these payments on a regular basis because they're left with little or no wiggle room in their budgets. Some have even moved back in with their parents in order to keep their finances under control. In the long run, education is well worth making some sacrifices for, but if you're truly suffering because of student loan programs, there may be strategies available designed to provide you with some relief. Following are three possible options for you to consider.
Student Loan Forgiveness Programs
You may quality for student loan forgiveness programs and not even know it. Many people mistakenly believe these programs and limited to those in the medical field, but those working in public service jobs may qualify as well. For instance, if you work for a city, county, state, or federal agency that provides public services, you may be able to get at least some degree of forgiveness for your student loans. Those employed with nonreligious nonprofit agencies may also qualify.
Check Out Income-Driven Student Loan Repayment Options
One of the worst things about defaulting or falling behind on student loans is that this has the serious potential to ruin your credit rating for many years, which may negatively affect your ability to make even small purchases on credit. An income-driven student loan repayment program can reduce your loan payments to as little as 10-percent of your overall discretionary income. There are four variations of this plan available to accommodate different financial situations.
Explore the Possibility of Bankruptcy
It's a common misconception that student loans are not eligible for forgiveness under bankruptcy in any circumstances, but this is not the case. The Undue Hardship Exception, however, provides a path to forgiveness for those who are able to prove to the satisfaction of the courts that continuing to make the loan payments would result in them not being able to maintain a minimal standard of living. To be considered for this exception, you must file an adversary proceeding with your local bankruptcy court. Regulations vary by jurisdiction, so be sure to engage a skilled bankruptcy law attorney in order to obtain the best possible results.