There are many options for people in Washington, D.C., who are overwhelmed with student loan debt.
Student loan debt can be crippling for people in Washington, D.C. In fact, according to a report from the U.S. News & World Report, the average amount of student loan debt that someone graduating from school in 2016 will hold is $37,172.
It can be overwhelming to face housing and living costs in addition to monthly student loan payments. Fortunately, people do have options for coping with financial struggles associated with these loans.
Know the loan
The first step of addressing the debt is understanding the details of the loan, such as when payments are due and how much they are. Also, many student loans come with a grace period, which is a period of time in which no payments are due. Experts urge consumers not to ignore the loans during this time. Instead, the grace period could be used to develop a budget and even save money to go toward the loan.
Get on a payment plan
Some loans enable people to create an income-based or pay-as-you-earn plan. This could lower the minimum monthly payment due. Anyone struggling to pay the bill every month should contact the loan company to determine what options are available. Making these payments in full and on time is an important step in building or rebuilding credit.
Research loan forgiveness
The U.S. Department of Education reports that there are a number of circumstances in which a student loan could be forgiven. For example, if the borrower is a teacher and meets certain requirements, up to $17,500 in loans could be forgiven. Certain public service figures may also be eligible for loan forgiveness, as well as people whose schools closed or those who are disabled.
People who have serious financial troubles may already be exploring the idea of filing for bankruptcy. Through the process, debts are either discharged, or the consumer is able to put together a repayment plan that would ease the current financial duress he or she is in.
Student loans are not automatically eligible for discharge in bankruptcy. Instead, to get the debt dismissed, the consumer must prove that the loan is causing undue hardship. In other words, the following must be true:
- Making payments on the loan would mean the consumer cannot maintain the minimal standard of living.
- The consumer's current financial situation will persist for a significant period of time.
- The consumer made a good faith effort to make payments on the loan.
Although overcoming student loan debt can be difficult, it is certainly not impossible. Through working with the right professionals, consumers can make a plan that will preserve their financial future. Anyone who has questions about this topic should consult with an attorney in Washington, D.C.