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Dealing with student loans

There are a number of ways to pay off student loan debt. Failing to pay off your loan might have severe consequences. There are certain government programs that may help when you are struggling with student loan payment. These programs either limit monthly payments to a fixed percentage of your discretionary income, or absolve you of your federal loans. However there is a strict eligibility criteria for such programs and only people who meet certain requirements can benefit from them.


Student loan deferment and forbearance are two student loan strategies that allow you to delay paying off your loans for a limited period. While they're helpful in many cases, you should choose these strategies with consideration as the consequences might not be easy to comprehend.

Student loan deferment is when you are permitted to stop making payments for some time. This is only possible if you prove that you qualify. You may be able to obtain a deferment if you show that you are unemployed, are returning to school or going through economic hardship. Through deferment, you can either pay the interest or let it build onto the principal. For certain subsidized loans, unpaid interest may not accrue to the principal at all. You need to see which type of deferment you are eligible for.

If you are ineligible for a deferment, you may delay payments by loan forbearance. Like deferment, loan forbearance allows you to suspend payments for a limited time. However, unpaid interest will be added to the principal whether the loan is subsidized or unsubsidized. You must keep in mind that due to the interest added to the principal, your loan balance might end up higher when you come out of the forbearance. Forbearances are easier to obtain compared to deferments.

You might want to consider hiring an attorney to help you decide which option suits you best. An experienced attorney would assist you in taking the route which best suits your needs.


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