Helbing Law Office Logo by Timothy Helbing located in Appleton, WI serving chapter 7 and chapter 13 bankruptcy

When your degree does not lead to a high paying job

Student loans seemed like a great idea when you first started college. You could pay for your tuition, graduate and earn enough money to make the payments. Unfortunately, you only have a six-month grace period before you have to make that first post-graduation payment. When you are earning entry-level wages and trying to pay rent and take care of your other living expenses, it can seem like an impossible task to keep up with your student loans.

If you are like most other students transitioning into the work-force full-time, you may already be at least $27,000 in debt. Making the interest payments alone is not going to get that debt paid down. Not making the minimum payments at all will send you into default. If you have student loans and you are struggling to handle the payments or are already in default, you may still have some options available. Read further to find more about what other graduates in Appleton are doing to deal with student loan debt.

Contact the lender

When you find yourself in a difficult financial position and cannot pay your student loans, the first thing you should do is contact the lender. Missing the payments will trigger aggressive calls from debt collectors and it will negatively affect your credit. Your lender may be able to offer you some options so that you stay in good standing while more effectively managing the debt.

Request a deferral

If you have federal student loans, you automatically have a six-month deferral from the time you finish your last class to start making payments. You may qualify for an additional deferral if you meet certain criteria. For example, if you are unemployed, in the military, attending graduate school, or still working on your degree on a part-time schedule, you might be able to get a deferral. However, while you do not have to make payments during a deferral period, the debt is still subject to interest charges during that time.

Apply for a 12-month forbearance

If the lender turns you down for a deferment, you may qualify for a forbearance. In order to qualify for this option, you have to be experiencing a serious financial burden. For example, if you have excessive expenses due to a major illness or injury, the lender might approve the forbearance.

After default

If you have already defaulted on your student loans, you still have options available. You can take steps to declare bankruptcy, consolidate your debt or try to complete a rehabilitation plan. The absolute worst thing you can do is nothing.

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