Student Loan Credit Problems

Student loans can be a burden to pay back. Payments can be high, especially if you are a graduate who owes tens of thousands of dollars in student loans. If you've missed payments or defaulted on your loans, your credit score will be affected, possibly preventing you from getting other kinds of credit. There are many programs that can help you get your student loans into repayment status, which will help to rebuild your credit profile.

Deferment

If you are unable to pay your student loans, you can ask your lender for a deferment. A deferment is where your lender agrees to not accept payments from you for a certain period of time. A common type of deferment is an in-school deferment, where you don't have to repay your loan as long as you are in school full time. While your student loans are in deferment, your credit score will not be negatively affected.

Income Based Repayment

Income-based repayment (IBR) is a student loan repayment plan that caps your monthly payments to a percentage of your income. In some cases -- if your income isn't high enough -- your payment may be as low as zero. You can qualify for IBR if you have Stafford, Grad PLUS or consolidation loans from the Direct Loan or Federal Family Education Loan. However, you won't be able to get IBR if your loans are in default.

Loan Forgiveness

You may be able to have part or all of your student loans forgiven by the federal government if you perform volunteer work, military service or teach or practice medicine in high-need areas. For example, if you serve in the U.S. Army in a high-need area, you may be eligible to have up to $65,000 of your student loans forgiven or you can work as a teacher in a high-need area -- like an inner-city school -- and have a portion of your student loans paid off for every year you work.

Consolidation Loans

If you have multiple student loans, you may find it difficult to keep track of all of your repayments. With a consolidation loan, you can send one check out to one lender and not have to worry about multiple payments. Once you have a consolidation loan, you can extend your repayment schedule to make your payments lower and more affordable. In order to find out which loan consolidation programs might be available to you, contact your lender.