Many graduates have completed their degrees through the help of loans. With the present unemployment problems, how can we support our struggling fresh graduates?
An average college grad comes out owing $22,500, per FinAid.org – a scary sum in good economic times. Presently, unemployment at its highest threatens. If you are one of those crushed by the bills, here are some advices you can probably use.
Ask for a break.
Underemployed or unemployed borrowers may possibly defer paying back federal Stafford or Perkins loans for up to three years at a time, according to Mark Kantrowitz of FinAid.org. On some loans, the governmentpays the interest. If you cannot qualify or your loans are from a private source, try asking for a forbearance, a temporary reprieve during which interest still accrues.
Pay a percentage.
From a fixed amount, try to switch monthly payments to 15% of discretionary income, as defined by the Department of Education. If your incomestays low and you still have a balance after 25 years on this plan—10 if you’re in public service—the government may take care of the balance.
Stretch them out.
You may consider stretching the term on loans of 10 years or less suggests financial planner Matthew Davis. 34% off monthly payments can be sliced off just by extending a 10-year loan to 20-years. You also have to know that interest over the loan doubles. So, once your income increases, you should go back to the original schedule.
Cut the rate.
Inquire about refinancing. Check if your loan is in a locked in rate or if it can be possibly refinanced. If the latter, you might want to take advantage of the offer.