What are Student Loan Repayment Initiatives?

In an effort to make college more affordable, many lenders are offering assistance in student loan repayment. These initiatives particularly rose out of the recession in 2007-2009 where graduating students found themselves jobless and in heavy debt. Student loan repayment initiatives come in many forms and differ by lender.

Deferment

Students who are unable to find employment after school may opt to defer loans. This is particularly common with graduate school students who are seeking high-level employment at a time when salaries are fairly low. Deferment may be offered interest-free for some lenders, but most borrowers will be responsible for making interest payments on the loans for this time period. 

Grace Periods

Grace periods allow students a certain amount of time after graduation to find employment and develop a salary before they need to be repaid. Grace periods are common on a number of federally-guaranteed loans, and they can be built into many loan programs through private lenders. 

Loan Forgiveness

Some borrowers seek forgiveness to wipe out at least a portion of their debt, but this is hard to achieve. In order to have debts erased through loan forgiveness, a borrower must usually prove financial crisis that was unforeseeable at the time the loan contract was signed. 

 


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