A Student Loan and Different Ways to Defer the Debt

One of the debts exempt from a bankruptcy discharge is a student loan debt. It use to be that only certain government type student loan debts were exempt from bankruptcy discharge, but after the 2005 bankruptcy law changes, both private and government student loan debts are now exempt from discharge. Nevertheless, there are different ways you can defer the payments of your student loan.

Student Loan Debt Bubble, 1980-2011

Student Loan Debt Bubble, 1980-2011 (Photo credit: Occupy* Posters)

With the economy still tight and jobs scarce, many graduates are finding their offers for a salary may not cover the cost of their increasing student loan debts. More than half of the college graduates who got student loans within the past four years owe between $14,500 and $17,900 on their loans. The average starting salary for a college graduate has been around $30,000.

Just by simply doing the math, most of you can understand why college graduates today are feeling the pressure from their loans. Many are already feeling the heat from third-party collection agencies and since student loans are exempt from bankruptcy discharge, filing bankruptcy is really not an option for the new grads to protect themselves against these type of creditors.

If you have had a rough time in making your student loan payments, one of the options you might have in overcoming your situation is to defer you payments. This may afford you enough time to increase you income. With a deferment, you lender approves your delaying the repayment of the principal of your loan over a predetermined period of time. Depending on the type of loan, the interest on the loan may or may not accrue.

Here are some of the different ways you can defer student loan debt which may afford you the time necessary to overcome any related problems:

  • Qualified work related disciplines can offer student loan deferments. If your student loan went toward entering certain work related disciplines like school teaching, a federal student loan can be deferred for a predetermined amount of time. In addition, a certain percentage of the federal student loan may be forgiven for each year of experience obtained while working within the field of discipline.

  • You may receive a deferment of federal student loan debts if you work for the betterment of your country. Serving in the military, entering the Peace Corps, or providing teaching support at a public institution located in a low-income area are examples of these type of deferments.

  • Attending a qualified school can also provide a deferment of many student loan debts. If you need to further your education, attending certain schools might entitle you to defer the payments for your student loan while attending.

  • Certain hardship cases will entitle you to defer certain student loan debts. Economic hardships can entitle you to a deferment on a student loan debt and are typically used when you become unemployed, have a medical problem, become disabled, or get pregnant. If you qualify for an economic hardship deferment, you will be deferred from making your payments for up to 3 years. Interest on Stafford student loans will not accrue but interest on other student loans might accrue.

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