For most Americans, the cost of a college education inevitably involves taking out student loans. Unfortunately, student loans can be overwhelming to pay off later. Millennials and Gen Z are putting off life milestones like buying a house, getting married, and having children because of their student loan debt. ACCC explains student loan solutions for those who are struggling to make payments.
Student Loan Consolidation
One of the most popular student loan solutions is debt consolidation. Combining multiple loans into a single new loan, student debt consolidation can make it easier to repay student loan debt. By increasing the amount of time over which the loan must be paid back, student debt consolidation can help to lower your monthly payments. There are a few different options for student loan consolidation. It depends on what type of student loans you have.
If you took out federal student loans, you can apply for consolidation directly on studentloans.gov. You can choose a repayment plan based on your income or your loan balance. Choose whichever option makes the most sense for your situation. With federal student loan consolidation, there are no credit requirements like with private student loan consolidation. If you have private student loans, you can apply for a consolidation loan, but you will need to have good credit.
Though there are many advantages of student loan consolidation, there are a few drawbacks. For example, your original loans may have had discounted interest rates, which will be lost when you consolidate. This means you may end up paying more than you would have if you did not consolidate.
Student Debt Forgiveness
Student loan solutions are not limited to just consolidation. Depending on how long you’ve been paying on your student loans and what industry you work in, you may be eligible for student debt forgiveness. Certain employees who work in public or nonprofit jobs qualify for public service loan forgiveness if they have been paying on their student loans for ten years. You also must be employed full time to qualify. Other student debt forgiveness programs may be available for borrowers who are entering community service, military service, and health services careers.
For teachers and other education professionals who took out a Perkins loan, you may be eligible for loan cancellation. To qualify, you must have been working full time for at least one year and be working in a high-need or critical area. Another option for student loan forgiveness teachers can apply for is the Teacher Loan Forgiveness Program. If you teach full-time for five complete and consecutive academic years in a low-income school or educational service agency, you may be eligible for this program.
Student Loan Solutions Through Credit Counseling
It’s difficult to know what student loan solutions are available if you’re dealing with these issues on your own. Calling a credit counseling agency like ACCC can make your life a little easier.
During your credit counseling session, our certified and highly trained counselors will work with you to understand all the particulars of your financial situation and put together a detailed review of your income, expenses, assets and debts. Then we’ll lay out all of your options – from federal student loan relief to ways to consolidate private student loans. Next, we’ll help you choose the student loan solutions that make the most sense for you. As you put your plan in place to get out of debt, our counselors will support you every step of the way.
If you struggle to pay off debt, ACCC may be able to help. Schedule a free credit counseling session with us today.