Roughly 45 million Americans individually owe more than $1 trillion in student debt owed by banks and colleges to the government. Most of those students are struggling to pay off student loans and more each month. Unfortunately, the federal government has been slow to work with Congress in developing a concrete plan to help educate our country’s youth on budgeting, money management, and repayment options. Over the last 10 years, college expenses have increased by nearly 16% nationwide and student debt has increased by 99%.
However, with this increase in student debt forgiveness programs, there are many options available for paying off student debt. If you are unable to work less and find yourself struggling to pay your bills each month, you are a candidate for federal student debt forgiveness programs. If you are struggling to manage your finances, you may be eligible for a deferment or forbearance. A deferment will keep you from accruing late payment or penalties. Forbearance lets you work less and receive the benefits for that time.
You may also qualify for direct benefits from the federal government through Direct Loan Consolidation. Direct Loan Consolidation allows you to consolidate all of your federal student debt into one manageable monthly payment. The federal government distributes a portion of the funds to your schools or organizations, and the remainder goes to you. The goal is to allow you to pay off your debt without accruing late payments or penalties. You can also get direct benefits from Direct Loan Consolidation that go directly to lower interest rates. For most borrowers, this translates into significantly lowered monthly payments and fewer interest payments, which leads to financial relief.
Another way to obtain federal student debt forgiveness is to follow good money management habits. In other words, pay your bills on time. If you find yourself in situations where you must rush to pay your bills, evaluate your decision and make every effort to pay on time. One way to improve your money management is to choose better repayment options for your loans. For example, some students opt to pay their loans through forbearance. In this case, the lender forgives a portion of your obligation each month, which allows you to pay a lower monthly payment.
Other behaviors that can lead to federal student debt forgiveness are irresponsible behavior when it comes to managing household spending. Many families are not properly using or conserving their monies, which results in excessive spending and ultimately increases debt balances. Families should ensure that their monthly household budgets include a surplus, which refers to the excess amount of money left over after taking all necessary expenses into account.
Some people find that using federal relief approaches tend to be more successful than seeking professional counseling. Students with unmanageable debt may also find relief through these programs. These relief strategies are based on meeting the needs of borrowers and addressing their unique circumstances. Therefore, these plans are tailored to suit specific borrowers’ needs. Borrowers should work with qualified specialists to determine their unique financial circumstances. There are several sources for obtaining information regarding student loan forgiveness programs, such as:
Individuals who are currently enrolled in college would benefit most from this type of loan forgiveness program. Because more Americans are struggling to pay their student loans, there has been an increase in federal funding over the past few years. When applying for federal student loans, you would need to see if you qualify for any federal funding. Although the exact eligibility requirements vary by each individual program, most students would benefit from qualifying for some type of federal assistance. It is important to speak with a student aid specialist in your college to find out exactly what your specific eligibility requirements are.
There are many other reasons to consolidate your college debt in order to obtain student loan forgiveness. However, it is important to remember that this only makes sense if you are eligible for it. If you would like to find out more information on this subject, you may want to complete one of the following survey experiments: