The financial deluge that our country is going through is forcing even students to focus more on money than on their studies. Graduate students are looking for jobs that they can manage without having to jeopardize their studies and also help them to fund their expense during the college years. But these odd jobs are not going to help them pay for their education. For that they have to take loans.
For many, a loan spells danger as the job market is not at all reassuring. So, the fact that one has a graduation or a post-graduate degree does not mean that a plush job awaits him or her. In fact, employers nowadays prefer a graduate with some kind of job experience than a post graduate without any. It can either be an internship or a part time job. Interns, as a result, tend to bag better and higher paying jobs.
However, not many students are unable to manage their studies and a job. So, they are at a disadvantage when the repayment time comes. Missing one payment will land their loans in a defaulted status.
In the case of defaulted loans the consequences are severe. The first problem is that the credit score is affected. Due to the credit reporting that the lenders engage in discourages other lenders from giving you any further financial assistance. Apart from this there is wage garnishment, tax rebate offsets, interception of state benefits, etc.
When one considers the effect of any one of these consequences, one feels it necessary to take the steps when there is still time. Some of the options that a student loan defaulter might consider are discussed below.
Many of the graduates are unable to get a good job and therefore are unable to pay off the debt in time. So, they can go for loan deferment that will delay the start of the loan repayment. The major benefit is that no interest accrues during this time and you will get the time to arrange the money to pay off the debt.
Whichever on you choose you have to act quickly. You need to contact the lenders and work out a payment plan as soon as possible to stop them from transferring your case to a collection agency.
Jonathan is a passionate blogger and writes on various financial issues. Here, he writes how student debt consolidation can help a student get rid of the debts.