When it comes to paying for your college education, student loans are the answer for many people. With little to no interest rates, deferment options and full coverage many students take on loans as quickly as they do study habits, but what happens when you graduate and its time to pay up? With the economy at a standstill and the unemployment rate at 9.3% (down 3% from 1990) many students are wondering “what do I do with this degree?” Many are unable to find that perfect job they spent years building up the education for but the loans are on their own timetable. Lenders might be sympathetic to your struggles, but they still are looking for repayment.
Can I Get A Job To Pay My Student Education Loan? What concerns most of us is jobs — jobs that enable a college graduate to enter the workplace at an income level where he or she can make ends meet and manage student loan repayment without parental financial support or more government subsidies. According to the report by The Project On Student Debt, for graduating students the average college debt is $24,000. After adding in the interest, the payback can escalate to over $31,000. These days it’s tough to find a job to cover basic overhead, and most young people don’t factor in the cost of their student education loans until reality sets in. College tuition and fees have risen four times that of the median income since 1982. Graduates are not getting jobs and cannot pay off their college debt.
Fixed Interest Rates While most credit cards carry variable interest rates, federal student and parent loans are fixed-rate loans. With a fixed interest rate, you have the security of knowing that your student loan rate and monthly payments won’t go up even when general interest rates do. Many credit cards will also penalize you for late or missed payments by raising your interest rate. Federal school loans keep the same rate regardless of your payment history.
Referred Repayment Repayment on both federal student loans and federal parent loans can be postponed until six months after the student leaves school (nine months for Perkins undergraduate loans). With credit cards, however, the bill is due right away, and the interest rate on a credit card balance is generally much higher than the interest rate charged on federal school loans. If you’re experiencing financial hardship, federal loans also offer additional payment deferment and forbearance options that can allow you to postpone making payments until you’re back on your feet. Even most private student loans – non-federal education loans offered by banks, credit unions, and other private lenders – offer you the option to defer making payments until after graduation. Keep in mind, however, that even while your payments are deferred, the interest on these private student loans, as well as on federal parent loans and on unsubsidized federal student loans, will continue to accrue. If the prospect makes you nervous of having deferred college loan debt that’s slowly growing from accumulating interest charges, talk to your lender about in-school prepayment options that can allow you to pay off at least the interest each month on your school loans so your balances don’t get any larger while you’re still in school.
So if you haven’t contractually binded your parents and don’t want to just walk away from those loans, consider your options. If the career you are working towards isn’t taking you on, then maybe you need to take on a part-time job. Find ways to budget your money, maybe sell some items on eBay or even have a garage sale.
Now that I am in graduate school I have taken on student loans for the first time and I can sympathize with other students in this economy. I take my debts seriously but I also look for ways to pay them off as fast as I can and keep my credit rating good. It’s all about being responsible with your money, creating a budget and if possible stop using your credit cards (save them for emergencies – or at least until you can pay them in full every month).
Student Loan Forgiveness Programs Whereas the only way to escape your current credit card debt is to have it written off in a bankruptcy, several loan forgiveness programs exist that provide partial or total student loan debt relief for eligible borrowers. Typically, these loan forgiveness programs will pay off some or all of your undergraduate and graduate school loan debt in exchange for a commitment from you to work for a certain number of years in a high-demand or underserved area. The federal government sponsors the Public Loan Forgiveness Program, which will write off any remaining federal education loan debt you have after you’ve worked for 10 years in a public-service job.
Other federal, state, and private loan forgiveness programs will pay off federal and private student loans for a variety of professionals – veterinarians, nurses, rural doctors, and public attorneys, among others. Ask your employer and do a Web search for student loan forgiveness programs in your area of specialty.
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