Congratulations on your recent graduation! It's a great feeling to have accomplished a goal like graduating from college. Adulation and a great party follow the cap and gown ceremony. Then, within six (6) months you start getting notices in the mail. Your loans become due. Maybe you haven't even had a chance to get that dream job, or any job with this present economy. Whether you're working or not, there are a few things you can do immediately that can help you stay in control or even get out of student loans quickly.
First, you must understand and know whether you have federal loans or private loans. How can you tell. A visit to the National Student Loan Data System will give you a list of federal loans only. If you don't see the loan listed there, then it's a private loan.
Second, deal with the federal student loans first by immediately consolidating them after graduation. If you sign up for automatic payments, you may be eligible for a slight interest rate reduction. If you cannot afford the Standard repayment on your federal loans there are other options for repayment. You can explore an extended repayment; graduated repayment; or extended graduated repayment. There are also income sensitive programs like Income Contingent; Income Based; or Pay-As-You-Earn programs. However, you don't automatically qualify for any of the available programs and that is where it gets confusing. Also, your loan servicer doesn't necessarily want you to know about these programs. In fact, their low level representatives may not even be aware of your options. Vist Student Loan Borrower Assistance (dot) org for more information on the available programs.
Some federal loans can be forgiven or even discharged without filing bankruptcy. There are public service forgiveness, teacher forgiveness, and full discharges if you become totally and permanently disabled. Also, if you never received your GED or high school graduation and the school falsely certified you for entry, your loans may be forgiven. Unpaid refunds and closed schools qualify some for forgiveness of their loans.
Student loans can be discharged through bankruptcy, but they must meet an undue hardship test first. It's a 3-part test that requires a present undue hardship, a continuing undue hardship, and a look back at what you have done to increase income and reduce expenses and the effort put into repayment of the loans.
Third, address private student loans only after you have your federal loans on an affordeable repayment plan. The reason being is that the federal government can collect on its loans forever. Private student loans generally have a four (4) year statute of limitations (California Law) on their ability to take legal action to collect the loan. Unfortunately, private student loans provide no safe harbour or alternative repayment options like federal loans. However, you can control private student loans through a court approved repayment plan under Chapter 13 of the Bankruptcy Code in order to buy time to improve your financial situation and obtain that dream job.
First, you must understand and know whether you have federal loans or private loans. How can you tell. A visit to the National Student Loan Data System will give you a list of federal loans only. If you don't see the loan listed there, then it's a private loan.
Second, deal with the federal student loans first by immediately consolidating them after graduation. If you sign up for automatic payments, you may be eligible for a slight interest rate reduction. If you cannot afford the Standard repayment on your federal loans there are other options for repayment. You can explore an extended repayment; graduated repayment; or extended graduated repayment. There are also income sensitive programs like Income Contingent; Income Based; or Pay-As-You-Earn programs. However, you don't automatically qualify for any of the available programs and that is where it gets confusing. Also, your loan servicer doesn't necessarily want you to know about these programs. In fact, their low level representatives may not even be aware of your options. Vist Student Loan Borrower Assistance (dot) org for more information on the available programs.
Some federal loans can be forgiven or even discharged without filing bankruptcy. There are public service forgiveness, teacher forgiveness, and full discharges if you become totally and permanently disabled. Also, if you never received your GED or high school graduation and the school falsely certified you for entry, your loans may be forgiven. Unpaid refunds and closed schools qualify some for forgiveness of their loans.
Student loans can be discharged through bankruptcy, but they must meet an undue hardship test first. It's a 3-part test that requires a present undue hardship, a continuing undue hardship, and a look back at what you have done to increase income and reduce expenses and the effort put into repayment of the loans.
Third, address private student loans only after you have your federal loans on an affordeable repayment plan. The reason being is that the federal government can collect on its loans forever. Private student loans generally have a four (4) year statute of limitations (California Law) on their ability to take legal action to collect the loan. Unfortunately, private student loans provide no safe harbour or alternative repayment options like federal loans. However, you can control private student loans through a court approved repayment plan under Chapter 13 of the Bankruptcy Code in order to buy time to improve your financial situation and obtain that dream job.
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