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Thousands Plea for Student Loan Forgiveness

Why have so many recent college graduates and twenty-somethings been enrolling in debt consolidation programs or similar services? For the majority of them, the main culprit has clearly been student loan debt. With fewer jobs available, many recent graduates have been forced to settle on lower paying careers. It goes without saying that paying off upwards of $40,000 in student loan debt can be difficult on hourly wages. Even with a decent job, thousands of students have barely put a dent in their loan debt.

Student Loan Forgiveness

With so many young people desperate to get out of their loans, there’s been a strong movement encouraging the government to forgive student loan debt. While actually clearing student loan debt, especially that from private lenders, is nowhere close to happening, there are signs of change in the industry. Talk of an Income-Based Repayment plan has come into fruition and could be a tremendous financial help for some people. In this program, many borrowers will have their monthly payments capped at less than 10% of their gross income. If their student loan debt is still not paid off after 25 years, whatever is remaining will be forgiven. It’s not perfect, but it’s certainly a step in the right direction for borrowers that end up using most of their income on loan repayment. Of course, this program is designed for those trying to repay federal loans, with no protections in place for those with private loan borrowers.

Bankruptcy Not an Option

The financial situation for some students is so dire that they would likely put some strong consideration into declaring bankruptcy. However, thanks to the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, private student loans are one of the debts that cannot be cleared through bankruptcy. Fortunately, students can still make use of debt consolidation to get more affordable payments and possibly even better rates.

If You Can’t get Student Loan Forgiveness

If you’re struggling to repay student loans and likely won’t receive forgiveness, don’t give up yet. Take a look at these tips and strategies to get your debt paid off without sacrificing your current lifestyle in the process:

  • Depending on your current circumstances, you may be eligible to defer your student loans payments for a few years. In most cases, you’ll need to be able to demonstrate that you cannot attain a full time job, are experiencing economic hardship, or plan on returning to school.

  • Is your entry level salary making it impossible to pay down your loans? Find out if you can extend the life of your loan and lower your monthly payments. You’ll end up paying more in interest, but it will provide temporary relief.

  • In the case that you think you could benefit from professional help, consider enrolling in a student loan debt consolidation program. With their help, you may be able to get improved rates and payments. At the very least, you should be able to consolidate your various debts into just one, which can make repayment easier and less stressful.

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