Many college graduates in Henrico County are putting off major milestones, such as getting married, buying a house and starting a family, because they are hampered down by student loan debt. Others are not only dealing with those realities, but also with barely even being able to make ends meet because of unmanageable student debt. This is a very unfortunate situation that thousands of people throughout Virginia and the entire nation are finding themselves in.
In fact, student loan debt has ballooned to $1 trillion in the U.S. More than 70 percent of those who earn a bachelor’s degree do so with a dark cloud of debt hanging over them. So, what are your options if you are overwhelmed by student loan debt?
One first step is to make sure you are signed up for the best available repayment plan. The Department of Education offers several different options for federal loan repayment, and some of these are income-based.
Federal loans also have options for suspending or even reducing payments that may help you. Even private loan servicers may be willing to work with you.
More options may also be coming down the pipeline. In 2010, a law was passed that capped monthly payments on newer federal loans to 10 percent of a borrower’s monthly income. President Barack Obama has recently issued an executive order to expand this cap to those who borrowed prior to October 2007 or who stopped borrowing by October 2011.
Lawmakers are also currently considering a bill that would allow people to refinance their student loans at lower interest rates.
While these options may help some borrowers, there are others who need more drastic forms of debt relief. Student loans generally cannot be discharged in bankruptcy. However, bankruptcy can be a viable option for some consumers who also struggle with other debts. Bankruptcy can erase credit card debts and medical debts, for example, freeing up disposable income to stay current on student loans. Every situation is different, however, and those who are considering bankruptcy should seek legal counsel.
Source: The New York Times, “Obama plans steps to ease student debt,” Jackie Calmes, June 7, 2014