Each year more young adults graduate from college with a four year degree, and nearly $35,000 in debt. For those who go on to pursue graduate or medical degrees, the average debt is almost 5 or more times that amount. As tuition has risen by 130 percent over the last 20 years, the cost of an education is going far beyond the out of pocket costs per year and are extending into a lifetime of overwhelming debt. Student loan debt has become a plaguing problem among Americans under the age of 30 and is leaving many with few options for relief.
While filing for bankruptcy is generally not an option for resolving student loan debts, there are actually a few options that may help alleviate the financial pressure. The obvious answer is to make more money, which in today’s job market is easier said than done. However, if finding additional employment is proving to be difficult the lender may be able to grant a deferment. A deferment can temporarily suspend or lower payments. Typically, these are granted for individuals that are returning to school, unemployed or suffering an unforeseen economic hardship. It is important that a debtor contact their lender and apply for a deferment or hardship before any default on the debt. Lenders may not be willing to grant payment assistance to a debt already in default.
Debt consolidation may be another solution, but should be considered with caution. While consolidating student loan debts into one, lower monthly payment may ease the financial pressure each month they can come with some hefty terms and conditions. Consolidating debts should be pursued directly with the lenders or through a federally monitored program, rather than a random third party company. It is best to ensure the lowest interest rate possible and get a copy of the consolidation agreement in writing.