Unemployed Graduates may Qualify For Student Loan Relief

Online, September 12, 2010 (Newswire.com) - Unemployed college graduates and those struggling in the current weak economy who are having trouble repaying student loans may seek help through loan deferments and forbearance programs. Borrowers who qualify due to financial need may apply for a loan "deferment," in which case the government will pay the interest payments during the period of time the student cannot afford to make payments. Most types of federal loans also have "forbearance" programs, where the borrower can temporarily with hold payments but is still on the hook for the interest that continues to build while payments are on hold, which is then spread out over the 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.

More and more former students are defaulting on their federally guaranteed student loans. According to a report from the U.S. Department of Education, default rates for federally guaranteed student loans are at their highest level in almost a decade. For 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).

In March of this year, the total number of unemployed college graduates reached 2.3 million. The credit crunch accompanying the housing and employment contraction has hit young business owners, especially recent graduates and those without an established credit history particularly hard, causing many to struggle when paying back student loans. Some are 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 loans to finance startup businesses as an alternative to traditional employment.

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