Options for people having trouble with student loans

10.20.09
By Timothy Jones

Young people who are facing the prospect of having difficulty paying their student loans do have a few options that can come into play if they are in the middle of needing debt relief.

A recent report from the Associated Press noted that the class of 2009 is going to have to start paying off its student loans soon. However, young people who will find bills in the mail for their educational debts may be able to qualify for deferment or forbearance.

"These are really important options for people who are struggling," Edie Irons, a spokeswoman for the Project on Student Debt advocacy group, told the AP.

There are a few ways for people to qualify for student loan deferment. People who plan on continuing their education, or who join the military, can qualify to have their loan payments delayed. Furthermore, the AP notes that having financial difficulties can make graduates eligible for deferment.

In order to claim financial hardship, a person cannot make more than $16,245 annually in the lower 48 states. They may also qualify if they are unemployed. For hardship, the deferment lasts for one year, whereas unemployment deferments are examined every six months. Graduates can reapply for both hardship and unemployment deferments for a period of three years each.

Forbearance is another option for those having trouble paying off their student loans. An example of a situation where forbearance would be given is if the person is having health problems.

The federal government also recently put forward new measures to help people with student loans. A new program that takes into account a person's income and the number of dependents they have may decrease the amount of loan payments.

As some current graduates struggle to pay off their student loans, people who are still in college are finding their tuition increase. According to the College Board, the average price for a year at a four-year, public university went up to $6,585 for the 2009-2010 school year, an increase of 6.4 percent over the previous academic year.

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Though students may be happy with their degrees, they are going to start paying off student loans soon.