Stafford Loan Repayment

Options for a Stafford Loan Repayment
What options do you have when looking to settle your Stafford loan repayment? As you know by now, you signed a master promissory note stating that you would pay back this educational loan to the U.S. government. This debt must be paid after the deferment period ends, which is either upon graduation, withdrawing from college or failing to meet half-time college hours. Now that you know the government’s view on it, what are your options if you are having financial trouble?

Obviously, you can try to debate the loan, if you feel that some ethical wrong has been performed. For example, the Stafford loan can be canceled either partially or totally if you or the school have committed an error. If the school closes with 90 days of your enrollment and they were unable finish the program of study you are not obligated to make a Stafford loan repayment. If the school did not qualify your status accurately before they began studies, you can qualify for loan cancellation. If you did not receive a refund that was due to you, or if someone else forged your signature, your debt can be canceled. Additionally, you may be able to qualify for debt cancellation if the school fails to properly evaluate your ability to benefit from the coursework before beginning studies. (Not during or after) You may also qualify for student loan cancellation if you become permanently and totally disabled or if you or your loan dependent dies.
Understand that a loan repayment cannot be written off simply because you feel you received poor training, unqualified instruction or questionable equipment. You also cannot remove the obligation simply because the school failed to provide job placement or even other services that it “promised.” Technically, debt cancellation is possible due to a bankruptcy status. However, this is complicated and there is no strong chance that the court will be willing to forgive an agreed upon federal debt. This is not just an ordinary creditor you are dealing with! Before assuming anything with bankruptcy consult your legal counsel.
Now that you understand your obligations, there are two more options to consider for Stafford loan repayment: college debt consolidation, which refinances your loan and reduces the financial pressure, or debt forgiveness, which involves contributing your efforts at volunteer organizations. The former of these options is usually recommended, since volunteer work is demanding with time and location, and furthermore, because not everyone can qualify for special interest organizations. Carefully consider all of your options before making a decision on how to handle a Stafford loan repayment.

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