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How to Get Out of
Student Loan Debt
   Student loan debt defaults are at an all time
    high and are only going higher. In 2010 the
    default rate was at a staggering 7%, one year
    later...8.%.
   These astronomical default rates will only go
    higher as the economy stagnates and people
    struggle to make the payments. But still there
    are others who are making the payments and
    who are getting out of student loan debt.
Federal or Private?
   Pay off your private student loans first. Interest
    rates, even though low now, may rise in the
    future. You also will not have the protections
    offered you through federal student loan
    programs. You must keep your federal student
    loans current though.
   Once You’ve paid off the private loans, consider
    adding that payment amount to your federal
    loans. This will not only pay the loans off sooner
    but will save you money on interest.
Can’t make the payments?
   If you are struggling to make the payments on
    your student loans, consider having the loan
    terms extended. This will lower your monthly
    payment but bear in mind, you will probably
    more than double the interest you will pay.
   Also, before you default, keep in mind that there
    are no statutes of limitations on federal student
    loan debt. Also, there is no bankruptcy
    protection. The creditor can and will continue to
    collect the debt long after you have defaulted.
Income based repayment plans
   There are three repayment plans that are
    tied to your income: income-contingent,
    income-sensitive and income-based. One
    of these plans may be a viable option for
    you if you are having trouble paying your
    loans. Some of the plans may take your
    payment down to $0.
Student loan forgiveness options
   There are several ways to have your federal
    student loans forgiven. If you are in one of the
    income-based repayment plans and you meet
    certain income stipulations, your debt may be
    forgiven after 25 years if you stay current on
    your payments.
   Your debt may be forgiven in as little as 10
    years if your are in one of the income-based
    repayment plans work in certain public service
    jobs, including teaching, health, military and
    public safety jobs.
   The military offers plans for student loan debt
    forgiveness as well as certain high-need
    occupations such as doctors and nurses.
    Teachers may also have options for student loan
    forgiveness.
   Forbearance may be an option. This will allow
    you to stop making payments for a specified
    amount of time. The interest will continue to
    accrue however. If you are in financial difficulty,
    you can ask for a forbearance to buy you time to
    get your financial situation under control.
Bankruptcy won’t help
   You will not be able to have your federal student
    loans forgiven through bankruptcy. Your only
    options are to pay the loan (whether modified,
    forgiven, or with regular payments) and default.
    It is not recommended you default on your
    student loan debt.
   In summary, the best option is to own up to the
    fact that you owe the debt and make every
    effort to make the payments. If you find you
    can’t, contact the student loan guarantor
    immediately

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How to get out of student loan debt

  • 1. How to Get Out of Student Loan Debt
  • 2. Student loan debt defaults are at an all time high and are only going higher. In 2010 the default rate was at a staggering 7%, one year later...8.%.  These astronomical default rates will only go higher as the economy stagnates and people struggle to make the payments. But still there are others who are making the payments and who are getting out of student loan debt.
  • 3. Federal or Private?  Pay off your private student loans first. Interest rates, even though low now, may rise in the future. You also will not have the protections offered you through federal student loan programs. You must keep your federal student loans current though.  Once You’ve paid off the private loans, consider adding that payment amount to your federal loans. This will not only pay the loans off sooner but will save you money on interest.
  • 4. Can’t make the payments?  If you are struggling to make the payments on your student loans, consider having the loan terms extended. This will lower your monthly payment but bear in mind, you will probably more than double the interest you will pay.  Also, before you default, keep in mind that there are no statutes of limitations on federal student loan debt. Also, there is no bankruptcy protection. The creditor can and will continue to collect the debt long after you have defaulted.
  • 5. Income based repayment plans  There are three repayment plans that are tied to your income: income-contingent, income-sensitive and income-based. One of these plans may be a viable option for you if you are having trouble paying your loans. Some of the plans may take your payment down to $0.
  • 6. Student loan forgiveness options  There are several ways to have your federal student loans forgiven. If you are in one of the income-based repayment plans and you meet certain income stipulations, your debt may be forgiven after 25 years if you stay current on your payments.  Your debt may be forgiven in as little as 10 years if your are in one of the income-based repayment plans work in certain public service jobs, including teaching, health, military and public safety jobs.
  • 7. The military offers plans for student loan debt forgiveness as well as certain high-need occupations such as doctors and nurses. Teachers may also have options for student loan forgiveness.  Forbearance may be an option. This will allow you to stop making payments for a specified amount of time. The interest will continue to accrue however. If you are in financial difficulty, you can ask for a forbearance to buy you time to get your financial situation under control.
  • 8. Bankruptcy won’t help  You will not be able to have your federal student loans forgiven through bankruptcy. Your only options are to pay the loan (whether modified, forgiven, or with regular payments) and default. It is not recommended you default on your student loan debt.  In summary, the best option is to own up to the fact that you owe the debt and make every effort to make the payments. If you find you can’t, contact the student loan guarantor immediately