Student loans are something we all must deal with, it is nearly impossible to attend college without accumulating debt, and as everyone with career goals must attend a university, federal direct student loan debt in the US is greater than students’ collective credit card debt. Though many students may not realize it, student loan debts appear on credit reports and will never disappear until they are paid off even if a former student declares bankruptcy. Student loans will have a great effect on what kind of credit line you will receive when it comes time to buy a home or new car, so keeping them in tip-top shape directly affects many other aspects of your life. Read on for some good ways to keep these loans in good standing.

When the day comes that you have no choice but to begin paying your loans, but you are not financially stable enough to do so, you must get into contact with your lender. Doing so will only help because federal lenders are much easier to deal with than the creditors you are used to dealing with. Explain the pitfalls of your current situation and ask for help. See what kinds of payment plans are possible so that your loan does not default. You should be able to work out a plan without missing any payments, and a small monthly payment may be a temporary fix until you can work your way out of your current financial problems.

Many lenders are very flexible and may give you more time overall to pay off the total debt. By doing so, they will greatly reduce the monthly payment you must make. Of course, if you decide to do this you must realize that you will be paying more money over time in interest than you would if your payments were higher each month. If, say, you are on the ten year plan, it may be beneficial to switch to a twenty year plan, thereby reducing your monthly payments by about half. If you expect to be making more money in the future, you can always change your payment plan later on.

If you are not making much money or if all the money you make goes to your current bills then you can apply for an income-based payment plan. With this plan, you can make small monthly payments without letting your loans fall out of good standing. This only works with government loans, and it is a very good option for those on a very tight budget. After 25 years, any remaining balance could be written off if you have made all your payments on time. A private loan will not offer you the same kind of options, unfortunately.

Those who are very lucky may be able to have their student loans cleared though this is no easy feat. This also requires some kind of lifetime commitment. For example, those who studied to be a nurse may be able to sign a contract to work with a certain agency over a period of time in exchange for having their loans written off.

Author Bio: Ellie Lewis recently spent time researching student loans. Her son is going to apply for a federal direct student loan.

Category: Finances
Keywords: student loans,federal direct student loan