Most Federal Student Loans Offer Option To Defer Payments

Online, December 22, 2010 (Newswire.com) - For former students who are finding it hard to keep up with day-today finances and pay back their student loans, there are options that can help. Struggling graduates can opt to defer or suspend payments on their student loan if they are out-of-work or struggling financially.

According to a report from the U.S. Department of Education, the default rates for federally guaranteed student loans are two percent higher than two years ago and at their highest rates in a decade.

A loan "deferment," is a program in which case the government pays the interest payments during the period of time that the former student cannot afford to make payments. Most types of federal loans also offer loan "forbearance" programs, where the borrower can suspend payments temporarily but remains responsible for the interest that continues to build while payments are on hold, which are then spread out over the remaining life of the loan. It is important to note however, that student loan deferments and forbearances can each be used only for a maximum of three years per loan.

Those borrowers who are experiencing trouble repaying their federally backed loans can call their lender or visit www.federalstudentaid.ed.gov. They may also access the web site www.nslds.ed.gov or can contact the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).

As the unemployment trap has worsened - even for college graduates - some graduates have decided to start small businesses as an alternative to traditional employment.

Some are even turning to non-traditional lenders for personal loans to shore up their short-term finances. Many, even as they struggle to make student loan payments, have sought business startup loans to finance new businesses. For more information on applying for a private small business loan, click here. America One Unsecured offers a wide range of loan products, including personal loans, small business and new business startup loans.