Repaying Student Loans

College students who graduated in june hit the six-month automatic deferment on student loans this month, but many are still unemployed. and with national unemployment rates reaching up to ten percent in recent months, many college graduates are finding themselves both jobless and racking up major debt. "I was surprised, it just kept adding up," Kelean Lundry, college graduate said.

According to the latest study the average student has $23,000in school loans when they finally receive their diploma. And as tempting as it may be to toss aside an envelope from loan lender, that may be one of the worst things you can do. "Sticking your head in the sand and pretending it will go away, is not an option,they will start taking your taxes and all those other benefits you have will cease," Jennifer Hill, of Washburn University financial aid department said. Financial aid experts say federal loans give students several options for repayment.

The standard options allows students to pay a fixed amount monthly, repaying the debt within ten years. Another option, graduated payment, starts out with a low payment amount and gradual increase every two years. And the newest option available, as of july 2009, is income based repayment which caps the monthly payment based on income so that it is affordable. But if you don't have a job yet, counselors say deferment is the best option.

A deferment suspends loans temporarily with out accruing interest, because of situations like unemployment. Some students may also be eligible for an economic hardship deferment which suspends the loan for up to three years. And if you are not deferment eligible you can request a forbearance, which temporarily postpones payment with interest. Some graduates found relief in just making payments and consolidating their debts. "I was stressed at first when I had multiple loans, because it was a lot to keep track of, but consolidated them it got easier," Lundry said.

Regardless the loan option you choose the financial aid experts we spoke with said the most important thing was to keep in contact with loan lenders about what you are going to do.