Staying on top of your student loan payments is an essential part of life after college. If unexpected expenses arise or you are unemployed, it can make it difficult for you to pay even the minimum amount due each month. If you discover you are falling behind on student loan payments here are some tips you can do to help alleviate your situation.
Understand How You Came to This Point
The first step in unearthing yourself from a financial problem is to identify the root cause. In some cases, such as underemployment, this is a simple identifier whereas in other instances, you may have to examine your finances to understand how you fell behind. If you fall into the latter category, it's important to look at your expenses over a three-month window to determine ways to save money. Since your student loan payments are a priority, you might have to do away with cable or a contract cell phone plan until you can maintain timely payments. The goal here is to identify why you are in the position you are in and develop action steps to prevent this from occurring again.
Contact Your Lender
The next step is to contact your lender(s). When you speak with them, tell them the reasons why you are having trouble keeping up with your payments. In many instances, they can work with you by offering solutions to remedy your past due account(s). In some cases, they might be able to offer you a deferment or forbearance on your loans if you are experiencing an economic hardship; you are attending an accredited university at least half time or you are in active military service.
Along with forbearance and deferment, there are a wide variety of other options available to you including income-based repayment plans. This is where you pay a specific percentage of your income per month, which if you are under or unemployed can significantly reduce your monthly payments. In all cases, the only way you'll know what your options are is by contacting your lenders.
Investigate Loan Forgiveness Options
Another route you may want to investigate is loan forgiveness where you might qualify to have anywhere from a portion to all your student loan debt forgiven through programs offered by federal and state governments. Typically, these apply if you are in teaching, public service such as military and nursing professions. In some cases such as serving in public service, you have to make a specific amount of payments (up to 120) before qualifying for forgiveness. You can also participate in programs such as the Peace Corps or Teach for America. When you participate in these programs you can receive student loan forgiveness for up to 70 percent of your student loan debt.
In all instances, it's important first to understand the reason why you fell behind on your payments. From there it's important to contact the lender to devise a strategy to help you catch up and stay current on your loans. Considering that staying current on your student loans can help build your credit score, it's imperative that you investigate all options available to help you achieve this.