Everyone who decides to take out a student loan knows that, no matter what, they will eventually have to pay back all of the money they have borrowed plus any interest that is charged. The long term financial life of a recent college graduate can be seriously affected by the manner in which he or she goes about paying back their student loans. Most recent graduates have at least some difficulty making their student loan payments, but there are some ways to make the entire repayment process easier on yourself.
The federal government will forgive part of your student loan in some special circumstances. For example, if you engage in military service, work as a teacher in specific school districts, volunteer with certain organizations, or work in the medical or legal field in certain parts of the country you may be able to have some of your student loan forgiven. If you consider these options before you have to start repaying your loans, you may be able to pay everything back faster than you originally expected.
If You Don't Have Any Money, Just Admit It
Receiving a phone call from a recent college graduate who explains that they are completely broke is not any kind of out of ordinary event for someone who works with student loan repayment. Not making such a phone call to explain your current financial situation could be much worse for you, especially if your loan goes to default.
Defaulted student loans cause the person who borrowed them to be completely unable to borrow further funds. Besides that, the entire amount of the loan which remains can become due immediately. Collection agencies may charge a fee as high as 20% for their work in collecting the loan.
The wages you earn at your job may also be garnished in order to pay for your defaulted student loans. If this occurs, 15% of your wages are taken before you get your paycheck. Any tax refunds you are entitled to will also be held back from you by the IRS until you pay off your student loans.
In certain special circumstances, a person who has only recently graduated from college may be able to defer payments of their student loans. This is not the same as forgiving the payments, but it will allow an individual to get their finances in order before they have to start making payments.