Solving Student Loan Problems

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Student loan debtors do have options in solving any problems with repaying student loans. If such debtors are overwhelmed or unable to afford a monthly payment, they should immediately contact the loan servicer. A qualified student loan attorney may also provide invaluable assistance. The servicer should provide information regarding any available and recommended options to reduce or postpone a payment while maintaining a loan in good standing. This article examines some options for solving student loan problems.

Consumers with student loan debts may postpone payments on student loans using a deferment or forbearance. When an individual obtains a forbearance, the student loan debtor may make reduced or no monthly payments for up to 12 months, with interest continuing to accrue on all loans, whether subsidized or unsubsidized.

When student loan debtors receive a deferment of their student loans, the repayment of the principal and interest of the loan is temporarily delayed for the period of the deferment. During this period, a student loan debtor is not required to make any payments on the loan.

Student loan debtors are still ultimately responsible for paying the interest that accrues during the deferment period, but any payments are not due during the deferment period. Interest unpaid on a loan during deferment may be capitalized or added to the loan’s principal balance, potentially increasing it significantly.

While these options may provide assistance for student loan debtors with temporary financial hardship, they don’t allow repayment of the loan. In most cases, interest on a loan continues to accrue even during the deferment or forbearance period when payments are postponed. Thus, when the student loan debtor resumes making payments, the loan balance will be higher than it was prior to the deferment or forbearance.

It is therefore important to consider other available options such as an income-driven repayment plan before considering deferment or forbearance. If a student loan debtor is single and earning less than $1,486 per month, a monthly “payment” may be set at $0, which is what the payment amount would be with a deferment or forbearance. The difference and corresponding benefit is that the government may subsidize some or all of the interest.

Student loans may have both short-term and long-term financial consequences and effects. Whether you are married or single, the experienced South Florida defense attorneys at Loan Lawyers are here to assist you in resolving any issues relating to the repayment of your student loans. To schedule a free consultation at any of our three conveniently located offices, contact Loan Lawyers today by calling (888) FIGHT-13 (344-4813).