One of the fastest growing sources of debt among people under the age of 30 is student loan debt. The average college graduate leaves with $25,000 in loans. With a stingy job market, many of these graduates are finding themselves unable to make their payments.
As more young adults default on the student loan payments, a true financial crisis is on the rise.
4 Year Degree, Lifetime Of Debt
Prior the change in bankruptcy laws in 2005, some student loan debts were eligible for discharge in bankruptcy. However, these days graduates are not afforded the help that filing for bankruptcy can provide and many don’t know where to turn.
One option is debt negotiation directly with the lender. Private student loan debts can be negotiated relatively easily and can significantly reduce the financial burden. A forbearance can grant a temporary suspension of payments and are often granted for reasons such as medical illness, loss of a job, returning to school or starting your own business. Many private lenders may also be willing to lower monthly payments or interest rates on the loan.
Another option is federal student loan assistance programs. Many federal loan lenders offer their own settlement, consolidation or negotiation options to help those struggling to make their payments. As with any federal process, it can be lengthy and require much documentation on your part to secure a deal. However, ignoring your debts only leads to trouble. Getting in touch with your lender before you default can maximize your chances of successfully arranging a plan with your lender to resolve your debt.