It is estimated that student loan debt is a $1 trillion industry, a growing point of concern for borrowers and government officials alike. As the job market continues to challenge many new graduates, the chances at defaulting have inflated considerably. However, there are a few things we can do to better manage student loan debt troubles ourselves.
If you are, or have a in the family, a college hopeful begin looking into your financial aid options long before the time to pay tuition. Many people overlook grant programs and go straight for the borrowed money. There are grants available based on income, ethnicity, for applying to a specific field of study, performing research studies, and even hobbies or talents.
If you have to borrow the money, weight the benefits between a private and a federal loan lender. Private lenders may have lower interest rates on the initial loan, but also may be more likely to have rate inflations down the road; whereas federal loan interest rates are set by the market and are governed by Congress. On the other hand, defaulting on a federal loan is more likely to lead to swift consequences and you may not be able to obtain help for missing payments.
Defaulting on a student loan really leaves you with only a handful of options. You can request a deferment from your lender, which can suspend your payment requirements for up to a year or more. These are generally approved for things like financial hardships, going back to school, involuntary unemployment or opening/starting your own business. If financial hardship limits your ability to pay your debt for an extended period of time you could consolidate your debt, which would still require payment on your part. Another option is to consult with a Tampa bankruptcy lawyer to determine if your financial situation qualifies you for bankruptcy protection.