College Debt: How to Pay Back or Have Loan Forgiveness

Congratulations on finishing college. A new life is ahead. With a degree or diploma in hand the world is your oyster and you are now living in a sea of debt. Federal, state and private loans made the American Dream of a college education possible for many that never would have been able to attend otherwise. Yet, the debt
incurred can make life a living nightmare possibly for the next 10 years or more of life. Many who graduate with a 4-year degree are $30,000 - $40,000 in debt according to Dr Yohn of College Works 101. She states additionally graduates may have $10,000 in credit card debt. The burden of debt will take a toll that is more than just fiscal. Without getting a handle on debt, depression may be knocking at your door along with the bill collector.

TOOLS & TIPS

Believe it or not, you have the tools at hand to handle this challenge. Remember back to your freshman year when the syllabus was handed out in each class. In looking over the workload and then multiplying it be each semester, times for years the workload loomed. It seemed insurmountable; yet, you survived.

*Use Skills--Use the skills you gained in college to help stay abreast of the current rules and regulations that are changing related to student loans. The current administration is concerned about the amount of debt students are graduating with. In July 2009, the federal government is providing a bail-out plan for students. It allows borrowers to pay reduced amounts per month on their federal loan (sorry folks, federal loan only). If you have no income, in some cases you may not have to pay at all, that is until you become employed.

* Delay Repayment-- While in school your repayment schedule is delayed. Though not advocating becoming the eternal student, the nation is currently in a recession. This makes it more difficult to find a job that is going to support both you and your student loan. If continuing for an additional period of time is going to make you more marketable, improve your job prospects, land you a job at the college discounting your tuition while you continue to study, do it. Remember, once you finish school there is a six-month grace period prior to being required to begin repayment of federal student loans..

*Service Programs-There are a variety of service programs that postpone student loan repayment in return for service to humanity. These programs include participation in programs such as the Peace Corps, Americorps, or Teach for America. Some of these programs offer a small stipend while loan forgiveness occurs. This provides your resume with the added oomph it might need in the near future to put you over the top in getting the better paying job, the one that required experience. This website http://www.finaid.org/loans/forgiveness.phtml has links to these various programs. It has special links for teachers, social workers, lawyers, nurses, and those that want to work or are working of non-profit institutions (also known as 501c3)

* Government jobs-"Work for the Man" and apply for a civil service position. This means taking a civil service exam. Now don't go rolling your eyes. In most of these entry level positions, what the government means by "exams" is filling out paperwork. Your a college grad., I think you can handle it. Some of these positions offer amazing repayment benefits ranging up to $10,000/year with a maximum of $60,000. Kiss that debt, bye-bye.

As for your other loans, student loans can't be discharged. If you are having trouble with repayment, talk to your leader. They don't want you to default anymore than you do. It is in their interest and yours to work something out.