How to Deal with Your Student Loans!

With unemployment at a high, student loan default is becoming very common. Because the government is so aggressive in its collection efforts, this can be very stressful.



The bright side is that no matter how bad you are struggling, there are many programs that will help you. Let's take a look at a few!



Student loan deferment is when your lender agrees that you do not have to make a payment for a specific period of time. During this time, interest will not accrue and your credit will not be damaged. This is a great solution if you are in a situation where you cannot make your payment. You do have to apply and be approved for deferment, however. Things like going back to school, losing a job and health issues would all most likely be grounds for getting your loan deferred.



Even if you are not eligible for loan deferment, you may be able to get a loan forbearance. A forbearance agreement is similar to a deferment with a few key differences. First, you payment may not completely go away. Depending on your situation is may just be lowered for a period of time. Next, you loan will continue to accrue interest during this time.



Another student loan payment option is graduated payments. This is where you have a reduced payment now and know that it will increase at some point in the future. This option is very attractive to students who have just graduated recently. They are just starting in the employment world and expect their income to increase over time.



But, what about if you are already in default? Unfortunately, these options are not going to be available to you. But, once you get where you can afford to make a steady payment, you can rehabilitate your loan. Basically, you contact your lender and let them know that you would like to rehab your student loan. You will then need to make between nine and twelve on time payments voluntarily. (Meaning that payments made through wage garnishment do not count.) After this time period, your loan will be brought back to a status of current and the fact that it was ever in default will be deleted from your credit file.





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Vincent Polisi is the founder of Liferebooted.org. To learn more about student loans and

lease option investing

, please visit him on the web.