How Not To Pay Back Your Student Loan

Is there ever a chance you will not have to pay back your student loans? The answer is: YES! Depending on the type of student loan you have and when you obtained it, you may be able to cancel all or a portion of your loan under one of the following circumstances:

* The former student for whom the loan was taken has died. * You become totally and permanently disabled. * Your school closed before you could complete your program of study. * Your school falsely certified that you were eligible for a student loan. * You left school and were entitled to a refund but never received the money. * You teach in a Department of Education-approved school serving low-income students or in designated teacher shortage areas (other types of teacher cancellations are available for Perkins loans). * You serve in the U.S. military (partial cancellation for Perkins loans only). * You're a full-time employee of a public or non-profit agency providing services to low-income, high-risk children and their families (Perkins loans only). * You're a full-time nurse or medical technician (Perkins loans only). * You're a full-time law enforcement or corrections officer (Perkins loans only). * You're a full-time staff member in a Head Start program (Perkins loans only). * You are a Peace Corps or VISTA volunteer (Perkins loans only).

These circumstances apply mainly to federally funded student loans. Other lenders, however, may extend the same courtesy to you if you discuss it with them. They are not required to do so, but asking does not hurt.

Keep in mind that should the circumstances above change, you will most likely be asked to repay your loan. Find out beforehand what the exact conditions of the loan forgiveness entails. Doing so will help lessen any surprises in the future.

Student Loans For Graduate Students

For those who want to continue their education into the post-graduate level, there are still loan options available. The biggest ones are the same as undergraduate loans, the Perkins and Stafford Loans. Another resource is to look to private organizations for graduate loans. Below is a brief summary of the loans available to graduate students.

GOVERNMENT GRADUATE LOANS

Government graduate loans differ from undergraduate loans really in name only. So just like undergraduates, graduates have the opportunity to get a Perkins or Stafford loan from the government.

1) Perkins Graduate loan

A Perkins graduate loan is available to students who demonstrate financial hardship. It has an interest rate of only 5 percent and can finance up to $4,000 of the graduate student's education. For graduate students who are adversely limited economically, the Perkins loan is one of the best options.

2) Stafford Graduate Loan

Stafford graduate loans are available to any graduate student regardless of their financial situation. Two types of Stafford graduate loans exist: subsidized and unsubsidized. The difference between the two types lies in who pays the interest. For subsidized Stafford graduate loans, the government pays the interest. Students pay for the interest in unsubsidized Stafford graduate loans, though there is the option of not having to make payments until after graduation.

To apply for either the Perkins or Stafford graduate loans, one must submit a FAFSA form to the government. When the form has been processed the government will send a SAR (Student Aide Report). This will give further instructions on how to apply for these loans.

ALTERNATIVE GRADUATE LOANS

Alternative graduate loans, also known as private graduate loans, are loans funded by non-governmental entities. Companies offering these loans could be banks, credit card agencies or any other enterprise interested in helping graduate students secure student loans.

Department Of Education Direct Student Loans

There is a little known option available to students who need financial assistance. This is a direct loan available from the Department of Education. .

You can obtain an application by either calling the Department of Education or going online. Doing a Google search will bring you to their website. From there, you can get all the information you need to apply.

You can apply for two different types of direct loans - subsidized and unsubsidized.

A subsidized direct loan means that the amount of credit you receive is based on the tuition you need.

As long as you are in school, you will not be required to make a payment and you will not be charged interest. This is the best option.

An unsubsidized direct loan means that there is a limit to the amount of money you can borrow. With an unsubsidized loan, the amount that you require is not taken into consideration.

There is considerable interest charged to both these types of credits that you will be responsible for paying.

Loan Amount Restrictions

The maximum amount for a subsidized loan varies depends on what year you are in college. An undergraduate can receive a maximum of $2,625, and the maximum you can receive on an unsubsidized loan is $4,000.

For the second year of college the maximum increases to $3,500 for a subsidized direct loan and $5,000 for an unsubsidized loan. For the remaining years that you are in college, a subsidized loan remains at $5,500. The limit for an unsubsidized direct loan does not increase for the remaining years.

If you are a Graduate or professional student, the maximum you can borrow on a subsidized loan is $8,500 per academic year. Graduate and professional students who apply for an unsubsidized direct loan can borrow up to $10,000 per year.

How Do I Know If I Am Eligible For Student Loan Debt Consolidation_

If you are a parent sending your child off to college or if you are a student going to college for the first time, you are probably cringe whenever you receive a tuition bill in the mail--or when you thinking about buying $1000 worth of textbooks for next semester.

As the price of getting a college education rises in the United States, so does the demand for student loans and student debt consolidation services. Whether it be for graduate school or to study abroad, students are accruing massive debts beyond what was reasonable in the past.

These loans already have low interest rates and flexible pay-back terms because they are specifically targeted to members of society who are not in the work force; however, even with these rates, you may find it troublesome to pay them back on schedule.

Consolidations programs are tailor-made to help students manage their debt and avoid debt default. There are two ways in which these programs will deal with the problem: they will either reduce the principal or they will eliminate it altogether.

This is actually permissible for all loans where they allow pay-back in terms of specific services or higher education; whether or not this applies to you depends on the type of student loan scheme for which you opted.

If this does not work for you, you always have another option: you can seek the help of a consolidation agency. There are special consolidation agencies that deal with student debt problems.

Basic Types

There are generally two types of student loans: federal and private. If you have taken both, you should never consider consolidating them into a single package. Only federal loans have government backing; and hence, can be refinanced at low rates. It is always advisable to take all federal loans together, solve them; and then head for the private ones. Private student loans are generally unsecured and charge higher interest rates than their federal counterparts.

Conditions of Consolidation

There are certain norms that have to be in effect if you want to consolidate your student loan. To begin with, you have to be out of school or college and must be in the "grace period" of the loan; or must already be making repayments to avail the facility of a consolidation help service.

If you fit into the criteria, then you should move ahead to the next step, which is talking to the consolidation company and asking them to contact your creditors to reduce your monthly payments and interest rates. Just as with any other loan, student loan repayment affects your future prospects of loan-taking.

If student loan debt goes beyond eighty-five percent of your total income, it is seen as a negative score in your future credit assessment. This shows that even student loans have an influence on your future decisions as a borrower.

There are some consolidation companies who may qualify you for additional reduction programs, which not only reduce the interest rates, but also include grace period savings, on-time payments, and automated direct-debit payments.

Beware

Not all consolidation companies on the block are genuine, so make sure the one you apply for is a reputed one with sufficient evidence to support its creditability. Otherwise it will lead to doubling your problems, as fake companies will only add to your already high debts.