Many recent law school graduates are finding that the job pickings are slim
and have been so for the past year.
So what do you do when those pesky and scary student loan payments become
due?
Take a close and honest lo
ok
at your financial situation and your student loan repayment options.
If you have limited or no income, there are several options available to
you. You can file for a deferment, which will allow you to pay nothing on your
student loan. Loans in deferment still accumulate interest; therefore your loan
balance will increase over time.
If you are unemployed or experiencing a financial hardship you can
receive the deferment for up to 3 years.
If these deferments are used consecutively, you can receive a total of 6
years in deferments based on your financial situation. But of course those
deferments can often run out fast, so what other options do student loan
debtors have? Fortunately for those
who have exhausted their deferments or who don't qualify for a deferment, there
is a new option available to for repaying student loans--the income contingent
repayment plan or ICRP. Under
ICRP, student loans are repaid based on the debtor's income with the balance
being forgiven after 25 years of payments. For example, if a single debtor
earns $15,000 he/she would pay $0 per month towards his/her student loan. This repayment program can be
particularly helpful for students have large student loan debts over $100,000
and who can't afford high monthly payments that can often reach $1,000 per
month. To find out if you qualify for ICRP visit: studentaid.ed.gov/PORTALSWebApp/students/english/IBRCalc.jsp.