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Friday, June 17, 2011

Graduating With Lots of Debt and No Job

The greatest and wisest decision to make after graduating from high school is to continue your education by choosing to attend an institution of higher learning. Whether it is immediately after graduation or years later, it is always a good option.

Graduating With Lots of Debt and No Job
After making the choice, your attention is immediately focused on the financial segment of the learning experience. The day you walk across the stage with your diploma held high and a large smile on your face, is the proudest moment that anyone can ever experience. But that moment of achievement can be quickly wiped away when the reality sets in and the private student loan notices begin to arrive in the mail.

Due to the economic crisis jobs are not plentiful, and this is a major problem that is facing many college graduates today and for many reasons. Although there are those who are graduating with large school debts and no jobs, there are some alternatives available that can help ease the situation. Consider the followings:

1. Loan deferments

Loan deferrals are temporary solutions for students who are delinquent in their loan payments or needing the extra time until they can secure employment. You have to apply for a deferment within eight months after falling behind in your payments. The followings are qualified for deferments:

• Full-time student deferment. A full-time student is one who is enrolled at a minimum of 12 semester hours, six during the summer, at a higher learning institution.

• Graduate fellowship deferment. If you have completed a four year study and are now enrolled in a full time graduate program, you are eligible for a loan deferment.

• Rehabilitative training program deferment. The person eligible for this deferment must be receiving or is scheduled to receive some type of rehabilitation services. The program that the person will be taking must be certified and approved by the Department of Veteran Affairs.

• Economic hardship. This deferment is for those individuals who are having problems finding employment or totally disabled. The maximum time that is allotted for this deferment is 36 months

2. Consolidation

If you have multiple loans you can consolidate them and make one monthly payment instead of multiples. Consolidating all of your loans into one payment will make the deferrals easier to obtain. Most school loans can be combined except for private student loans. With the consolidations come different payback options that you can choose from. Some of them include:

• Standard repayment. This repayment allows you to pay a set monthly payment at a minimum of $50.00 lasting up to ten years.

• Extended repayment. You pay a set yearly or graduated repayment amount for up to no more than 25 years. This helps those who cannot afford to make large payments.

• Graduated repayment. This repayment is similar to adjustable rates, only your payment gradually increases every two years up to, but not to exceed ten years.

• Income Based repayment (IBR). This is a new repayment that is based on the family size and income. You are eligible if the repayment amount is less than the 10-year standard plan repayment amount.

• Income Contingent repayment (ICR). This repayment plan allows you to be able to make your payments without the worry of being burdened with a monthly amount that you can not afford to pay. Your payments are set according to you and your spouse’s, if there be any, annual adjusted gross income, the family size, and the total amount of the loan.

3. Forbearance

Forbearance is a payment relief that allows you to postpone your payments for a length of time because you are unable to make the payments. You can qualify for this type of payment relief if you do not meet the requirements for a deferment. The interest rates do not accrue in this situation, and it can be granted up to 12 months intervals but not to exceed three years.

4. Loan Forgiveness

To qualify for this program you must have been employed in some type of public service job and have made 120 timely consecutive payments. If this is the case, then your loan can be forgiven.

5. Freelance work

There are many freelance jobs that are available in the fields of, to name a few, performing arts, business, finance, marketing, and writing. Open your own doors by using the gifts and talents that are innate and from the learning that you have received. As one great poet said, “To have made an effort, is better than not making one at all.”

College graduates have a number of options, but they really have to be proactive to manage their student loans.

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