If you undertook a bachelor's or master's degree, it is likely that you also graduated with some debt. No one enjoys being in debt, and in these tough economic times, debt worries are exacerbated by high unemployment. However, those who are having trouble with their current student debt burden have some options.
Consolidation
If you are struggling with your monthly payments, and your loans are part of the government's Family Federal Education Loan Program (FFELP), you may consolidate your loans to reduce your monthly payments. These programs are designed to extend the term of your loan. So if the original term of your student loan was 10 years, you may extend it to 25 or even 30 years if the size of the loan is large enough. Note, however, that although your monthly payments may decrease, the overall cost of the loan will be higher as you will end up with more accrued interest. But if you anticipate that your earnings will substantially increase in the future, this could reduce some of your short-run worries.
Deferment
Deferment is available for students who are experiencing economic hardship. Again, your loan must be part of the FFELP program. You must also prove to your student loan originator your current financial status. Many people take out deferment during periods of unemployment or internship. However, it is also available for those who are returning to school and who attend the military. Deferment delays the earliest date of repayment, usually by six months to a year. Only a limited number of deferment options are available for each category of economic hardship.
Forebearance
Forbearance is usually available to those who have exhausted their deferment options. Unlike deferment, where interest is not accrued, interest does accrue during forbearance. Periods of forbearance are usually offered at the discretion of the loan company. Like deferment, forbearance is only granted to those who are experiencing financial hardship and are finding it difficult to make the monthly payments on their outstanding student loan.
Volunteer Programs
Two volunteer programs, sponsored by the government, offer assistance in the repayment of student loans. AmeriCorps is a loose confederation of volunteer opportunities designed to help Americans in need. In exchange for a minimum number of months in service, you may have some of your federal student loan reduced in the form of an AmeriCorps Education Award. Alternatively, the Peace Corps, which organizes international volunteer opportunities, has a similar program for student loan reduction.
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