What Everybody Ought to Know About Student Loans!

Print View | Html View Written by: Vincent Polisi
Word Count: 377 | Date: Sat, 1 Aug 2009 | 0 comments

If you are affected by delinquent student loans, you are not alone. It really is not surprising that there are so many people in this situation. What other loan can you get when you are unemployed and have no other means of repayment?

The good news is that there are many options available if you are having trouble paying your student loans. Keep in mind, that communication is critical, especially if you are just now falling behind.

The first is a deferment. If you qualify, your loans can be deferred for a set period of time. During this time, no interest will accumulate. Qualification for deferment include: going back to school, becoming unemployed or other financial hardship.

If you can not qualify for deferment, there is still hope. You may be able to arrange what is called forbearance. You will still be responsible for the interest, but under forbearance, the lender will either reduce or eliminate your payment for a set period of time.

For those just out of school, a graduated payment plan may be just what you need. This will allow you to make smaller payments now that will increase over time.

If your loans are already in default, you may have heard from one of the private collection agencies that the government has hired. If you have, you probably know how ugly these collectors can be.

These are important facts to keep in mind:

Student loans are generally not dischargeable in a bankruptcy.

-Lenders know this and will almost never negotiate a settlement.

-If you are due a tax refund, the lender will take this money.

Despite these negatives, there is a positive.

The law allows you to have all of the information removed from your credit file by rehabilitating your student loan. You do this by contacting the lender and letting them know that you wish to rehabilitate the loan.

Once you have made acceptable payment arrangements, you will need to make at least twelve payments on time. The delinquent history should be removed from your credit file once this is done.

Regardless of if you are facing default, or have already defaulted on your student loans, the government provides many options to cure your debt. The key is knowledge, communication and action.

About the Author

Vincent Polisi is the President of the nations leading Lease Option and Lease Purchaseprogram, Finance the Dream. Finance the Dream is proud to help buyers nationwide own a home, even with bad credit. To learn more about bouncing back after financial setback, please visit them at http://www.liferebooted.org.