Student loans have now become a huge portion of the national debt. A number of students after graduating from college have difficulty earning much money in the beginning. Yet what to do with student loans is confusing. And then there’s just the unexpected curve balls life itself can throw you. An older person with kids could lose their high paying employment and never go back to making what they were making before. Or one could get permanently disabled. Yet those holding student loan debts are often told nothing can be done. This is far from the truth.
If you’re having difficulty paying student loans, the first thing to do is call the issuer of the student loans and explain. You can apply for a student loan deferment or forbearance . Deferment or forbearance is especially useful for recent college graduates who have yet to find gainful employment, or for those who were working and lost their employment. Your student loan issuer may need proof of economic hard times such as proof that you’re on unemployment or on a welfare program. Deferment lasts one year at a time, depending on the type of deferment. Once you start earning enough money again, you should notify your loan issuer and work out payments with them.
Certain types of professions, such as working for the government, education or non profit sectors never pay much money. In these cases the government doesn’t want to saddle borrowers with debt for the rest of their lives. If one has worked in education, government, or the non profit sector for 10 years and has been making payments for 10 years, at the end of the 10 years the remaining balance on the student loans can be forgiven . One must contact the issuer of these loans and apply to have the student loans forgiven.
Then there’s the unfortunate category of those who are going to indefinitely go through hard times. Suppose someone loses their financial standing and they are never going to be able to recover it. It’s difficult, but possible to discharge student loans by declaring bankruptcy. After declaring bankruptcy one must show undo hardship. This was most famously done to date was a law school graduate who got his student loans discharged in 2013 by court order.
Another way one can have student loans discharged is to declare permanent disability. If one cannot work due to medical reasons and it’s a long term illness, if one’s doctor declares the patient permanently disabled the borrower can have his student loans discharged by applying for the total and permanent disability. In all cases, when loans are forgiven or discharged they are erased from the borrower’s credit report. So there’s never a reason for a borrow to be done and out by student loans, and there’s no reason to dodge debt collectors on them. Call up the student loan provider, explain the situation, and dealt with it from there.