Ways to Pay Off Student Loan Debt
Debt Relieft Companies you should be wary of.
Avoid companies that use high-pressure sales tactics, or that ask you for up-front fees - especially if you’re not dealing with the company in person. It’s illegal for debt relief companies to charge a fee until after they have performed services for you.
Also know that a company might be a scam if they:
- Make promises of immediate loan forgiveness or debt cancellation.
- Claim to have a “special” connection with federal student loan programs.
- Ask you to sign a “third party authorization” or “power of attorney.”
- Request your Federal Student Aid Pin. Honest companies will never use your PIN to access your student loan information.
Federal vs. Private Loans.
Federal student loans are made or guaranteed by the Department of Education. They might also be called a Direct Loan, Stafford, PLUS or Perkins. Any other non-federal student loan is considered a private loan. They can be made by a bank, credit union, student loan agency, or college or university. They might also be called alternative or institutional loans.
Contact your loan servicer directly.
If you’re struggling to keep up with payments, or simply can’t make a payment at this time, work with your loan servicer directly.
Acquiring a deferment.
During a deferment, you don’t need to make payments and depending on what type of loan you have, the federal government might also pay the interest on your loan during this time. To acquire a deferment, contact your loan servicer.
What to do if you don't qualify for a deferment.
If you don’t qualify for a deferment, you may still qualify for a forbearance. With a forbearance, you may be able to stop making payments or reduce your monthly payment for up to 12 months. However, interest will continue to accrue on your subsidized and unsubsidized loans, including all PLUS loans. To request a forbearance, apply directly to your loan servicer.
Note: If you don’t pay the interest on your loan during forbearance or deferment, it may be added to your principal balance and the amount you pay in the future may be higher.
How to hire a legitimate debt relieft company.
If you think hiring a debt relief company is right for you, know your rights. See our tips for hiring a debt relief company for more information.
For more information on student loan debt, contact the Consumer Financial Protection Bureau or learn how you can become debt free at http://www.bbb.org/debt/.