What to do About Unforgivable Student Loans

When you’re about to go to college, all you can think about is the great career that you’re going to have afterwards. As a result, you might take out loans that you think you’ll be able to pay off easily after graduation. Unfortunately, however, many people who think this way find themselves saddled with loads of unforgivable debt that can trail them for a lifetime. If you’re in this situation, you may be wondering what you should do.

You might think that filing bankruptcy is the right answer, but, unfortunately, this is a mistake far too many people make. In almost all cases, student loans cannot be discharged through bankruptcy. Of course, there are some rare exceptions, such as when a disability or other circumstances exist that make it veritably impossible that a person will ever be able to successfully make payments on the loan. If you think you may be in this rare situation, you should speak with a bankruptcy attorney to see if you can get exempted from your loans.

If you don’t qualify for that kind of treatment, and few do, you may find some respite through the College Cost Reduction and Access Act, which offers two plans to help make paying off student loans more manageable.

One of these plans is the income-based repayment plan, which, as the name implies, is based on your income. Through this plan, you can have your payments significantly reduced or, in some cases, even done away with altogether. Qualifying for this plan requires you to prove financial hardship and to have your debt in the form of a qualifying loan, such as a Stafford loan, a GrandPLUS loan, or a consolidation loan.

If this plan doesn’t work for you, you might instead qualify for the income-contingent repayment plan, which is available for those with debt through Federal Direct loans and Grad PLUS loans. With this particular plan, you will have a monthly payment based on either 20% of your monthly discretionary income or the amount you would have paid under a basic twelve year repayment plan multiplied by an income percentage factor.

If you think that you might qualify for one of these special plans or that you may otherwise qualify to have your loan payments reduced or eliminated, contact an attorney familiar with these matters who can provide you with further advice and guidance. This is the best way to get out from under the mountain of student loan debt and to be free for good.