5 Tips for Restructuring Your Student Loans

grad moneyThere are good debts and there bad debts. While financial aid offers millions of young people the ability to afford a higher education, a good debt can turn into a bad debt as soon as the student graduates and realizes that he or she can’t pay back their loan. While college can be a fruitful experience and can open a world of career prospects, the job market is just too dismal and recent grads are finding it harder than ever to pay back their loans. However, there are a number of promising loan restructuring programs that make it easier for college graduates to deal with the sometimes crushing burden of their student loan debts. Here are 5 tips for restructuring your student loans.

  1. Make sure that you thoroughly review your credit report. When you apply and are accepted for a student loan, it is typically not all lumped into one. In most cases you will have a brand new loan for each quarter or semester, because it is easier for a lender to organize your debts that way. The downside of this is that you might have an outstanding debt that you didn’t know about. Before you restructure your student loans, make sure that you have a broad overview of everything you owe.
  2. If you are in dire financial straits, it might be wise to move your loans into forbearance. This is a last ditch effort to save your debts from effecting your credit score. Forbearance will effectively stop the payments you owe, but it will not stop accruing interest. This way your debts won’t wind up in collections, which can ultimately effect your credit.
  3. It might also be wise to consolidate all your loans. Consolidation usually entails combining all of your loans into one lump sump. This is accomplished by finding a consolidation lender that will buy your student loans and turn them into one gross debt. In this case it can be far easier to pay the loan back, because the interest rates are much more tolerable.
  4. Another way to restructure your loan is to pay it off in larger settlements. This might put a big dent in your current financial situation, but it will benefit you in the long run. By paying off more of your debts now you can typically avoid the interest payments, which can make it more and more impossible to pay your loan back in the future. If your monthly payment plan is a certain amount, make sure to double, triple or quadruple it so that you can pay back your loans sooner than later.
  5. Lastly, look for government programs. Because the student debt issue has become such a serious problem, the government has intervened to make it easier for college grads to pay back their loans so that they can move on with their lives and careers. The other option, if you still haven’t taken out a loan and are still looking for colleges to apply to, is to take online courses from a college, like Washington State University (learn more about WSU online), that can make attaining a higher degree much more affordable in the first place. It is always better not to have to rely on student loans, especially if you don’t have to.