Student loan debt is a growing problem in the United States. It’s a massive burden of debt that tens of millions of students and young adults battle with every year. But if you are feeling overwhelmed by your debt there is help available. In this guide we’ll look at all available student loan help, from support programs to advice and more.
You may also be interested in our guides to Sending Money Online, Living Wage, Debt Consolidation and Unclaimed Money, all of which may be able to help reduce this ever-present financial burden and give you better options when it comes to your finances.
Credit counseling is there is guide you through the maze of debt. We usually keep serious financial problems to ourselves, which only makes the situation worse. We don’t want to burden others and there is also a sense of humiliation that debtors feel, but opening up about your problems really can help, especially if you open up to someone who knows what they are doing.
A good credit counselor can help you to get your life in order. They can help you to find better deals and consolidation options, to better manage your finances, and to help you see a light at the end of the tunnel. It’s also good just to be able to talk with someone who is on your side, someone who is there to help, because when you’re in debt it can feel like everyone just wants a piece of you and that no one is willing to cut you any slack.
There are many credit counseling services out there, just remember that you don’t need to pay a lot of money, or indeed any money at all, for good credit counseling. Not when there are scores of non-profits offering these services for free.
To find a service near you and get some help with your student loans, click onto this approved list of credit counseling agencies from the US Department of Justice.
Be Wary of Scams
Fortunately, there are many more genuine student loan help services than there are scams, but it’s important to be vigilant to avoid these. Be wary of anything that:
- Charges money.
- Makes grand promises about clearing your student loan debt.
- Is not affiliated with any official government department.
- Sends you unsolicited emails or letters.
- Uses pressure selling techniques.
Contact Your Student Loan Servicer
When you sign up for a student loan you should be assigned a student loan servicer, someone who serves as your contact throughout the loan period. This is true for all government loans and for many private loans, and this person does much more than just collect your money and answer some initial concerns that you have.
They are there to provide some options when you can no longer afford your repayments. So, if you are feeling overwhelmed and do not believe that you can meet the repayments, then get in touch and discuss your options.
You can find the details of your student loan servicer by logging into the National Student Loan Data System or by asking you private loan provider who your point of contact is. This will be a lot easier with federal student loans, which tend to be more forgiving, but it’s still something you can arrange with a private lender.
Private lenders are there to make money, after all, and they do not benefit if you default and they need to drag you through the process of acquiring debt collectors. If they believe that a few basic alterations on your plan will ensure they continue to get their money, they’ll usually be happy to do it.
Of course, the more you contact them to make such alterations, the less inclined they will be to accept.
Get Help from the Government
If you have defaulted on you federal student loans then there are a few things that you can do. All is not lost:
- Repay: The quickest and easiest way may also be the least accessible for the majority of borrowers. You basically need to pay off your loan as quickly as you can, getting out of the default by clearing the debt. However, it’s important to weigh up your options carefully because taking out a personal loan to pay off defaulted federal loans could result in higher interest rates and more of a financial burden.
- Consolidate: You can consolidate your federal student loans into a Direct Consolidation Loan, but only if you make three full payments on-time first. So, if you miss one payment and go into default just bide your time, focus on making the next three and then you can consolidate.
- Rehab: You can use debt rehabilitation to clear the default from your credit score, but you can only do this once. There are specific terms involved with this and you will need to discuss these with your student loan servicer, but it could be your only option if you have defaulted but are in employment, because you can request monthly payments that are based on your income.
Get a Student Loan Lawyer
If you have defaulted on a private student loan then your options are a little more limited and the lenders will be a little less forgiving.
If you default then they will come after you and will attempt to drag you through a lengthy legal process. If this happens then you can get help from a student loan lawyer. Just search the National Association of Consumer Advocates to find one in your area who can help with your case.
They will help you to find the best solution for you and for the lender, which may include bankruptcy.
One of the quickest ways to pay off your student loan debts is to apply for student loan forgiveness. Not everyone qualifies, but if you work in law enforcement, healthcare, or in the military then there might be something you can do. In some cases you will be able to clear all of the debt after a fixed number of years, in other cases the debt will become easier to manage. There are also grace periods available.
To learn more about the many types of forgiveness programs, if you qualify and how you can apply for them, click onto our Student Loan Forgiveness guide.