Coping With Federal Student Loan Debt

There are four alternatives to help borrowers cope with federal student loan debt. Debt counselors highly recommend the following two options for dealing with federal loan debt.

Public or Community Service

The College Cost Reduction and Access Act of 2007 requires ten years of full-time service as a public employee and 120 payments in conjunction with the Direct Loan Program. Community service in the Americorps or Peace Corps can reduce a borrower's federal student loan debt.

Income Based Repayment Plans

The new income based repayment program begins in July of 2009. Payments will be capped according to income and family size.

Categories of Loan Deferment

There are four kinds of deferments that apply to federal student loan debt. Regardless of what your reasons are caused by there are ways of coping with your debt.

  • Education-Applies to enrolled students.
  • Economic-Applies to unemployment and financial difficulty.
  • Disability-For disabled students.
  • Family Related-For mothers going back to work or experiencing parental leave.

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