Dealing with Debt

How To Deal With Student Loan Debt

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Congratulations on completing college! But maybe you’re not in a celebrating mood because your first student loan payment is due? You might be a college graduate in a rough or competitive job market, and have more student loan debt, credit card debt, or other debts than you can handle.

You might be struggling to find an entry-level job where you can use your degree and pay off your student loans. If so, this “how to” guide will show you the right steps to take to pay off your student loans as quickly as possible or maybe have that debt forgiven altogether.

First “real world” jobs that can help your debt issue –

A little over 1 million borrowers defaulted on their federal student loans last year, about the same as the previous year, according to an examination by Rohit Chopra from Consumer Federal of America which is a network of more than 250 nonprofit consumer info groups.

Publishing jobs in Manhattan or Brooklyn, NY pay about 40K at entry-level, according to JournalismJobs.com salary surveys – and we haven’t even factored in the New York cost of living. If you’re a Pittsburgh, PA college graduate, your humanities or art job is likely to pay under 25K – and Pittsburgh has a job market that’s robust for health care workers, but not so strong for liberal arts majors. Waiting tables or working retail might be a dreaded inevitability until something better comes along.

So, you’ve got student loan debt, you’ve got some credit card debt, and your entry-level salary or employment options look pretty grim. Maybe you’re thinking of enrolling in an online credit counseling or debt management program? That’s a great start! However, while you make plans for debt management, we at Advantage CCS encourage you to look for skilled opportunities that allow you to have your student loan debts forgiven while you’re actually using your degree to earn an income.

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Teaching is another great way for college grads to incorporate loan forgiveness into their debt management plans. Students can have significant portions of their Perkins loans forgiven for teaching, especially in low-income, high-risk, or under-served areas, according to The United States Department of Education. Depending on the state and the district in which the student is teaching education credentials might not even be required. Teach for America is a related program accepting college graduates with any type of degree. Students need not possess education credits; they need only have completed college with a 2.5-grade point average or higher. Upon completion of employment terms, graduates are awarded a stipend of $4,725 per year of service completed. After teaching for several years, it is possible to have the entirety of your student loan debts paid off.

Other professional positions also offer loan forgiveness or stipends as part of the employment conditions. AmeriCorps is a popular program for college grads, and it grants educational award stipends upon completion of service terms. There are several different branches of AmeriCorps, according to the organization’s official website: https://www.nationalservice.gov/programs/americorps/americorps-programs

Program options include AmeriCorps State and National service programs, VISTA, and NCCC Corps. Within each division, there exist a wide variety of job openings and choices for which a breadth of skill sets are needed.

The student loan forgiveness program – 

Student loans are hitting people pretty hard nowadays. Student loan debt has surpassed credit card debt in the US, and it doesn’t seem like there’s much help out there. We’re going to take a look at the Pros and Cons of the Obama Student Loan Forgiveness Program, also called the “Pay As You Earn” program that was announced early in Obama’s presidency back in 2012, but has just gone through a few modifications recently.


This program is for students who are currently unable to finish their student loan payments, but they’ve already completed a significant part of their payments for a long period of time. The program will help clear the remaining debt of anyone who has made regular payments on their federal student loans for a minimum of 20 years or after only 10 years if the borrower works in public service (for the government or a Non-Profit organization). People in the military who are working in other government departments might have their debts cleared even earlier than that.

The major benefit of this program is that students will no longer have to bear the burden of their debt in full. There are various student loan forgiveness plans out there, and each one aims to help you pay less somehow. These forgiveness plans may reduce the amount you owe or cap payments and interest rates to a minimum, thereby lowering your monthly payment and increasing the chances of affordability.


The Obama Student Loan Forgiveness Program currently only applies to federal loans such as unsubsidized Stafford loans. Anyone who has taken out private loans can also make use of student loan forgiveness programs offered by a number of private employers, but these loans are not covered under the Obama Student Loan Forgiveness Program.

Some employers have programs where they will agree to pay back your remaining debt if you agree to work for them for a certain period of time. While this typically applies to people in specialized jobs such as healthcare, a number of private companies have their own policies regarding student loan forgiveness. If you are interviewing for a new career make sure you ask about any tuition reimbursement programs that they might offer.

Another troublesome problem with this program is the difficulty that some borrowers are facing when dealing with their loan service providers such as Sallie Mae. These loan servicers collect the borrowers’ payments and fees. They also repackage and securitize the loans. Securitize simply means: “A pooled group of financial assets that together create a new security, which is then marketed and sold to investors” (from Investopedia). The problem is that many servicers used to originate federally subsidized loans themselves before the President cut them out of that side of the business back in 2009. So, it’s not in Sallie Mae’s best interests to lower monthly payments for borrowers, and some people could have a hard time when dealing with their loan service providers about student loan forgiveness programs. You must be unrelenting, savvy, and steadfast when talking to your loan service provider about student loan forgiveness.

The hope of this program is that it will lessen the debt burden on college graduates. Under the Obama Student Loan Forgiveness Program, loans don’t just get less expensive; they can actually disappear altogether. You must qualify for the program first and it could be tricky and sometimes unpleasant when dealing with loan service providers. You’ll have to contact your loan servicer first to see if you qualify for the program. If you do qualify then head over to www.studentloans.gov and complete their electronic request to enroll.

The consequences of failing to pay student loans –

It can sometimes be stressful making sure that you make your student loan payments; however, if you do not, consequences will follow. Student loan payments are especially important to pay. If you miss payments, your credit score will be negatively affected. Just like any negative mark on your credit report, this can keep you from getting a car, home, or any other type of loan in the future. This information will also be on your credit report for up to seven years. The government can also garnish your wages, which will allow your employer to withhold money from your paychecks. Not only would this be embarrassing, but it would also mean that you suddenly have smaller paychecks to work with. All of these reasons showcase the need to pay your student loans bills.

Student loan debt can seem like a nightmare. Many Americans struggle every day to pay back their loans and many can’t make it. Seven out of ten seniors (69%) who graduated from public and nonprofit colleges in 2013 had student loan debt, with an average of $28,400 per student. This represents a 2% increase from the average debt of 2012 public and nonprofit graduates. These kids also had a high unemployment rate of 8.5% of college graduates between the ages of 21 and 24. Overcoming student loan debt may seem impossible with those odds.

What does it mean to default on a student loan? –

The definition of default means: Failure to fulfill an obligation, especially to repay a loan such as a student loan, auto loan, or a mortgage loan. Let’s take a look at what it means to default on a student loan. To default means, you failed to make your payments on your student loan as scheduled according to the terms of your promissory note. A promissory note is the binding legal document you signed at the time you took out your student loan. If you default on your loan a few things will happen first: your loan service provider will most likely report the delinquency to the three major credit bureaus after 60-90 days of not receiving payment, your credit score will drop, this will be a derogatory mark on your credit report for years to come.

Do student loans ever expire or disappear? –

Many people wonder if their student loans payments ever expire. There are ways in which your student loan payments can end. If you become permanently and totally disabled or die, your student loans can be canceled. This means that your student loan debt will not be left behind for family members to pay. There are also other ways to cancel a student loan. This could happen if your school closed while you were a student. Another way in which your student loans could be canceled is if your school improperly trained and certified you for your job. While these are complicated situations and very rare, it is best to work with your lender to ensure that you take the correct steps to apply for a loan cancellation.

What are my options? –

If you are having trouble making student loan payments or have begun to fall behind, it’s important to get the help that you need. A Non-Profit credit counseling agency like Advantage CCS can help you plan a budget that fits in with your needs. This will allow you to track where your money is going, and allow you to make the necessary payments. They can also work with you to get some of your unsecured debt consolidated so that you are able to get back on track with your monthly payments. Most nonprofit agencies offer student loan counseling and certified counselors can help you understand all of your options and give you the information you need to make informed decisions about your unique situation.

Here are a few things that might work for you:

Loan forgiveness – There are some programs out there that will forgive all or some of your federal student loans if you work in certain fields. Jobs such as public safety, teachers, nurses, and a few others fall into this category. This program discharges any remaining debt after 10 years of full-time employment in public service.

Loan deferment – If you are having trouble paying loans back due to economic hardship, unemployment, military deployment, health problems, or enrollment in school, there are ways to postpone your federal loans. This process is called loan deferment. Deferment lets you temporarily suspend making your student loan payments.

Types of loans & grace periods – It’s imperative that you keep track of the lender, balance, and repayment status of each of your student loans. Different loans have different grace periods, or how long after leaving school before you have to start paying it back. Pay schedules or due dates should also be closely monitored. This will help you avoid any late fees or charges.

Tackle the most expensive loan first – Check to see which loan has the highest interest rate and pay that one off first. The Highest Interest Rate Method usually gets the debts paid slightly faster than the Debt Snowball Method (paying debts with the smallest amount first regardless of interest rates). Compare the interest rates and start on the highest one first. That will leave more money in your pocket when all is said and done.

Extended Payment Plan – Try to request the extended payment option, if possible. This will lengthen the repayment time and could help decrease the amount due each month. Though extended payment plans will cause more interest to accumulate, the interest is tax-deductible within limits. Call your loan provider to see if this is an option.

Income-based Repayment Plan – Some loan service providers may have this as an option. Your monthly payment would be based on the amount of income you are making each month. This plan limits the amount to a specific percentage (depending on the lender). It could help you keep current on your payments. Ask your loan service provider if they offer this type of plan.


If you are battling credit card debt along with student loan debt, then definitely give us a call today. The call is completely free and totally confidential. We can’t help you get rid of your student loan debt like we can with your unsecured credit card debt by offering a debt management program. However, we can discuss your options and educate you on different programs that might help you repay your student loan debt. If you pay off your unsecured debts, then you’ll have more money to put towards paying off those student loans as well, so it’s definitely worth giving us a call to find out exactly how we can help you. Call us at 1-866-699-2227 or visit us online at www.advantageccs.org

Whatever your situation may be, hopefully, your lender is willing to work with you to repay your student loan debt. Don’t ignore the problems and think they’ll just go away. There can be major consequences with defaulting on a loan. Be advised that most student loans are NOT dischargeable through a bankruptcy. Don’t wait until there is a problem! Act now!

Author: Lauralynn Mangis
Lauralynn is the Online Marketing Specialist for AdvantageCCS. She is married and has two young daughters. She enjoys writing, reading, hiking, cooking, video games, sewing, and gardening. Lauralynn has a degree in Multimedia Technologies from Pittsburgh Technical College.