June 15th, 2009 by Reed Allmand 
For those students who took out student loans, now is probably the worse time to be graduating. The economy is still in the tank and those students loans aren’t going away. Plus, the average student has about $22,000 in student loans and may feel overwhelmed to the point of defaulting (which is a no-no). To avoid default here’s some information about student loans that could empower you to get a handle on your student loans and avoid default:
- Student loans cannot (under normal circumstances) be discharged in bankruptcy. What this means is that if you default those loans will NEVER go away, they will simply be waiting for you and causing more financial issues in the future, including wage garnishment by the lender.
- Student loans have an extremely low interest rate. That means your student loan payments will never “balloon” similar to some mortgages. Because of this student loans can generally be repaid in about ten years using the standard repayment plan. That takes us to our next point.
- Student loan lenders offer generous repayment plans including a standard repayment plan, as mentioned above and several extended payment plans which allow you to pay a smaller amount each month. One of their newest repayment plans allows “low-income” borrowers to pay as little as $0 per month and forgives the balance after 25 years of payments. If you’re unemployed right now or just working odd jobs you may want to apply for this option instead of a deferment
- Student loan lenders offer several deferment options which include a deferment for unemployment and continuing your education. Be advised that during deferment, interest continues to accrue.
- Although student loans generally cannot be discharged in bankruptcy, they can often be included in a Chapter 13 bankruptcy repayment plan. Speak with a Dallas- Fort Worth bankruptcy attorney to find out more.
To find out more about how to get a handle on your student loans visit https://www.dl.ed.gov/borrower/DefermentFormList.do?cmd=initializeContext. Even if your loans are not through the direct program, this is a very comprehensive resource directly from the government.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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