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Trouble Paying Back your Student Loans?

Written by CB Experts

The sad weight of what you have borrowed to go to college comes down hard after college graduation. Some grads have trouble paying off those loans. The question, then, becomes. “Is there any relief?”

There is some relief if you have borrowed from the federal Direct Loan program. Your loan debt may be reduced if you agree to work in a public service job. The not-so-good news is that the Federal Family Education Loan program and the Perkins Loan program do not have the same provision.

If you have private loans for college, you have even less chance of finding relief. You can refinance your private loans for a lower interest rate, but that rate is tied to your credit score. In order to get that rate reduction, your credit score would have to have improved. You can also consolidate your loans. Consolidation helps by paying one fee for several loans which is easier and sometimes lowers your payment. Visit to get a list of banks and other lending institutions that will refinance and consolidate.

If you are in financial trouble after graduating and you are having trouble making your student loan payment, you should see a credit counselor to formulate a budget that will allow you to meet your living expenses and pay off any loans you may have. You can find credit counselors listed at The National Foundation for Credit Counseling website.

It is unwise to default on your student loan debt. The financial entity that you borrowed from will initiate a collection action which will hurt your credit score. That, in turn, will affect your entire financial future.

Bankruptcy does not always discharge student loan debt either. Even after bankruptcy you will still owe the lender. Only if you can prove that repaying your student loan is a severe hardship will the loan be forgiven in bankruptcy, but this is very hard to prove.

Student loans are larger than ever, and they do not go away. Pay them, consolidate, look into reduced interest rates or public service forgiveness, but do not default. Even bankruptcy can not help you now.

About the author

CB Experts

Content created by retired College Admissions consultants.