Alternatives to deal with student loan
Finishing higher education with a baggage of student debts is a common experience that youngsters face these days. The amount of money borrowed under Federal Family Education Loan Program (FFELP) has increased about three-fold since 1990; the reason of course is the enormous hike in student loan borrowings over the last decade.
Student loans, both private and federal, are usually not discharged by bankruptcy. So, most debtors with huge student debt obligations remain liable for the loans until and unless they are paid off. Are you are in a similar plight and struggling hard to repay your student loans with your limited funds? If your answer is yes, then there is nothing to panic. There are several ways ranging from debt consolidation to income-based payments that you can resort to and pay off your student loans with ease.
Here are a few options that you can consider:
• Loan Forbearance: This is great option to consider if you cannot afford to make the stipulated monthly payment due to lack of a full-time job. In forbearance your creditor will agree to postpone or reduce your monthly payment on the debt. All you need to do is convince your creditor that you are financially strapped and whatever you earn from your part-time vocation is not more than twice the federal minimum wage. If your creditor reduces the monthly amount, it will help you be regular on your payment. And when your financial hardship is over, you can return to the previous plan and expedite your repayment

• Loan Deferment: Deferment simply means to suspend your loan while you are still undergoing your education or not being able to find a job, facing financial adversity or have become disabled etc. You do not need to make payments when you are in deferment. But, the interest on your loan keeps accumulating during this period and you remain liable for it.

• Income-based Payments: In this option, your creditor will review your income every year and your payment plan will be adjusted accordingly. This is a good option if you have low or variable income.

• Graduated Payments: Sometimes creditors allow graduated payments on a temporary basis if the debtor is experiencing financial hardship. In this option, usually you need to make lower payments in the beginning. Then the payment amount increases gradually with time so your debt gets paid off faster. Graduated payment works well for those of you who expect an upward mobility in their careers.

• Rehabilitation: This option lets you create a new payment plan with your creditor once you have defaulted on your payments. The rehabilitation plan requires you to make twelve consecutive timely payments to get out of default status; during this period a new lender purchases your loan and your loan essentially becomes a new loan. You then get nine years to pay off the balance on the new loan. You are however liable for all interest on both the old and new loans.

• Debt consolidation: With debt consolidation you can merge your existing student loans into a single loan, which you can pay off at a fixed interest and over a longer period of time. Since your repayment period gets extended, you are might end up paying more interest. Also keep in mind that in order to be eligible for consolidation, you need to be current on your existing payments or at least you must have made three consecutive payments. However, all students are cannot be consolidated. So, before you set out to consolidate your student loans, check with your creditors.
Owing student debts is indeed very stressful, especially because you cannot wipe them through bankruptcy easily. But, some smart financial planning and wise money management can surely keep you away from all the stress. So, before you seek for relief from student debt, asses your income, savings and obligation meticulously and then choose your debt relief option to avoid further cash crunch. You can also consult a reputable credit counselor and get started with a debt relief option best suited to your circumstances.