As you’ll find in this article, refinancing college loans can be done in many ways - including college loan consolidation, and even cancelation. 

Looking at Renegotiating College Loans

Have you been falling behind on your student loan payments and worried the Department of Education will take your tax refund, garnish your wages, or sue you?

Bankruptcy should not eliminate your student loans, as a result of recent adjustments to the law.

But learning about your alternatives and following through can defuse the situation before any damage is done to your credit history or bank account.

Your first concern really should be in being sure that your loan isn’t in what’s called “default” - usually defined as not making a payment or attempting to renegotiate payments in the past 180 days.

If you are in default, your lender is extremely unlikely to renegotiate your loan. However, you can ask your lender to ascertain a “reasonable” repayment schedule. This is usually determined by info you supply - for example, monthly income, other debts, dependents, and the like.

After you have made payments as agreed for 6 months, you could then be entitled to a new loan.

Deferment of Loans

If you aren’t in default, you might possibly get your student loans “deferred,” meaning repayment will be delayed if you:

• Are permanently or temporarily totally disabled
• Are completely unemployed
• Have a federal loan and can prove that you are suffering an economic hardship (as defined by the lender)
• Are enrolled in school
• Are in the military fulltime
• Are providing medical care in a poor area or to the needy

 You’ll have to complete paperwork from the lender and follow through to make sure it’s processed correctly. With some loans, the interest on the loan will continue to build.

Forbearance

If you don’t qualify for a deferment, you might be able to postpone your student loan payments during a specific period of time through what’s called “forbearance.”

It’s easier to secure a forbearance when compared to a deferment, but you’ll carry on and rack up interest even throughout the forbearance period.

Canceling Your Loan

You could possibly request that your lender cancel your student loan entirely if you:

• Are permanently or temporarily totally disabled
• Are in the military fulltime
• Are teaching in a poor area or to needy students
• Are providing medical care in a poor area or to the needy
• Are providing certain types of community service, such as serving in the Peace Corps
• Are working in law enforcement, with certain loans
• Withdrew from school or the school closed before you could complete your degree and you did not receive a refund

Renegotiating or Refinancing

If you aren’t in default, and don’t qualify for deferment, forbearance, or cancellation, you might still be able to renegotiate a new repayment plan that’s doable with your current financial circumstances.

When you extend the time for repaying your loan, you’ll wind up paying more interest. Types of repayment plans include:

• Graduated repayment, with payments that start out lower and increase every few years. If you expect increases in income over time, this makes sense.
• Extended repayment, with a fixed monthly amount that goes longer than the period of your current loan (some as long as 30 years)
• “Income-sensitive repayment,” which fluctuates with your income (usually measured annually)

Consolidation

You just might consolidate all your student loans together at the renegotiated rate. You’ll probably end up paying more interest in case your loan period is extended, but you might be entitled to a lesser interest rate to balance it out.

Most consolidation lenders won’t consolidate student loans that total lower than $7,500.

Should you go with a consolidation loan, you need to make sure you can accelerate payments without a penalty, in case your financial situation improves as time passes.

If you are having problems making your student loan instalments, it’s most crucial to do something quickly, before you’re in default and you’ve damaged your credit score.

The sooner you educate yourself on your options and take action, the better.

For help with an Athens GA chapter 7 bankruptcy, call a bankruptcy attorney Athens. An Athens Georgia bankruptcy attorney could give you the help you need.

Even though this was written for an Athens, Georgia audience, it still has some good information for college students (and parents) everywhere. Refinancing college loans, even a college loan consolidation, are all ways to ease the financial burden of college students everywhere.