Ways to manage your student loan debt - Boston News, Weather, Sports | FOX 25 | MyFoxBoston

Ways to manage your student loan debt

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David Flores from Green Path Debt Solutions joins Murray Feldman in the Fox 2 Job Shop to talk about how to deal with school loans and re-entering the job market.

Job Shop Resource: www.greenpath.org   

Information provided by Green Path Debt Solutions:

More than 20% of all U.S. households owe student debt (37.1 million Americans; 34% are older than 40).

Student loan debt exceeded credit card debt in 2010, exceeded auto loan debt in 2011, and reached $1 trillion in early 2012.

27% of student loans are more than 30 days delinquent (highest delinquency rate are ages 40-49).

Only 37% of federal borrowers are reducing principal.

Young adults often delay buying a home, getting married, having children and saving for retirement.

WHAT HELP IS AVAILABLE FOR PEOPLE STRUGGLING WITH STUDENT DEBT?

· That depends on what type of loans they have. 

· Federal loans offer several repayment programs for people that qualify.  Two of the most popular are government programs that adjust the payment amount based on income.  Pay As You Earn (PAYE) is the newest program as of late in 2012.  Income Based Repayment (IBR) has been out there for a while. 

· Private Loans don't offer many options.

· The Public Loan Forgiveness Program enables government and non-profit employees to have some direct loans forgiven after 10 years of payments.

· Your lender may be willing to offer you a graduated or extended repayment plan to lower your payment amount.

· Consolidating loans is another option to lower payments, but you can only use this option once.

· Forbearance and deferment are short-term options that should only be used as necessary.  They buy you some time before payments are due, but meanwhile the interest continues to accrue and your balance grows.

WHAT CAN GREENPATH DO?

· GreenPath can help you explore your loan repayment options, which can be fairly complex.

· We can help you evaluate short-term strategies to postpone payments, such as deferment and forbearance.  We can also explore longer term strategies that reduce payments. 

· We'll help determine which programs you qualify for and even help you apply

· We will help you evaluate the options to choose the one that's right for you.

WHAT SHOULD HIGH SCHOOL STUDENTS AND THEIR PARENTS KNOW ABOUT PAYING FOR COLLEGE?

· Borrow only what you really need.

· Student loans are very easy to get, but can be difficult to pay back.  Interest charges cause the balances to grow quickly.

· Student loans are not dischargeable in bankruptcy.  You can have your pay garnished, tax returns seized, etc.

· Borrow from the federal government instead of a bank.

· Know exactly how much you will have to pay and when your monthly payments will begin.

· Consider going to a less expensive community college for two years and then transferring to a university.

· Spend student loan funds only on school expenses.

 

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