Many different factors have contributing to the rising level of student loan debt in the United States today. The rising cost of higher education paried with a downturned economy put many who were in school at the start of the recession in a bad financial position when the graduated and the economy was losing jobs.
Unable to meet their payment obligations, many people with student loan debt were forced into default. Others looked for second jobs or moved back in with mom and dad so that they could continue to make their payments. Few are aware of the variety of debt relief options and various payment plans available for publicly financed student loans.
In fact, those who have student debt held by the Department of Education can seek different types of repayment plans to make their debt more manageable, including one program that offers forgiveness for people who have worked in a public service job for ten years.
For those who qualify, loan payments can be adjusted to depend on one's income, never requiring payments that amount to more than ten or 15 percent of a person's discretionary income. After a ten year period of making these payments on time (or a total of 120 payments) while working in a qualifying public service job, the balance of the loan is forgiven. This can save some people in the range of $20,000.
For those who do not qualify for this program, getting out from under burdensome student debt can be harder, since this type of debt is generally not forgiven in a bankruptcy proceeding. However, other types of debt relief may be available.
Source: New York Times, "Relief From Student Loan Debt for Public Service Workers," Ann Carrns, Sept. 10, 2013.