How to Get Government Help With College Debt

The government offers several options for help with your college debt. The government has programs to make your payments affordable and to forgive your loans after 10 or 25 years of repayment, depending on your situation. To qualify for any of these programs, however, your loans must be federal direct or guaranteed loans, also known as Federal Family Education Loans (FFEL), and you must first get your loan into good standing.

Instructions

1

Rehabilitate your loan, if has gone into default. To rehabilitate a direct federal loan, according to Department of Education requirements, you need to make nine consecutive payments on time. For FFEL loans you must make nine payments over a 10-month period, within 20 days of their due dates. If rehabilitation is not possible for you, there are additional options to consider.

2

Consider consolidating your federal loans, if you can make at least three consecutive monthly payments. The consolidation process will combine all of your federal loans to give you one monthly payment. If you have older loans with variable interest, you will also benefit from a lower, fixed interest rate. The consolidation may also extend your repayment period making your monthly payments smaller and easier to manage.

The downside of consolidation is that you can only do it once. Additionally, you must be careful that your consolidated loan is still a federal loan and it is not a private consolidation. If you consolidate your federal loans into a private loan you will lose the option to take advantage of other federal college debt assistance.

3

Apply for Income Based Repayment (IRB) once your loans are in good standing. To do this you must contact your lender directly because each will have a different process. The IRB program will limit your monthly payments to 15 percent of any money you make that is over 150 percent of the poverty level. Additionally, after 25 years of payments, any remaining balance will be forgiven. You can shorten the repayment period to 10 years if you work in a public service job for all 10 years of your repayment. Public service jobs include teaching, government positions or any job with a non-profit employer.