Many people believe that student loans will be the next mortgage crisis. Mike Calhoun writes for a nonprofit center called Responsible Lending. He stated that there are many similarities between the student loan crisis and the mortgage crisis that occurred between 2007 and 2008.
Mike stated that there is a huge disconnect between the person’s ability to pay and the amount that they borrowed. He also stated that minorities are disproportionately affected by the student loan crisis. Additionally, student loan debt is lowering people’s credit score, which is making it hard for them to get a house.
Student loan providers are partially responsible for the debt crisis. They are not telling people about the repayment options. They are also not telling people about student loan forgiveness.
People have proposed various solutions to this crisis. However, there are some things that you can do if you are dealing with student loan problems. You can take one or more of the following steps.
Income-Driven Repayment
If you are struggling with the current payments, then you can apply for an income-driven repayment plan. This allows you to make payments that are based on your monthly income. You may also be able to get the balance forgiven after 20 to 25 years.
Student Loan Forgiveness
If you work for a non-profit organization or qualified service, then you may qualify for student loan forgiveness. You can get forgiveness after you have worked in your field for 10 years while paying off your student loans.
Borrow Responsibly
If you are still in school, then it is important for you to borrow responsibly. Take advantage of grants and scholarships first. Scholarships and grants do not have to be paid back. You can also take a private student loan. Private student loans have lower interest rates.
Make Extra Payments
You are allowed to make more than the monthly minimum payment. Making extra payments will help you pay off your loan faster. It will also help you save money in interest.
Dil Bole Oberoi
