Feds try to help, but many student loan borrowers still stranded without assistance

By Jan Miller

For the Deseret News

Published: Thursday, Feb. 7 2013 6:30 a.m. MST

The fourth group that does not qualify for any federal repayment assistance programs is the private loan borrowers.

Private loans often constitute a large portion of a borrower’s student loan debt. Many borrowers are not aware of the differences between private and federal loans when they receive them. As a result, they usually do not find out how this will impact their options (and upcoming bills) until after they are out of school and in repayment.

It’s much too late for them to back out then.

Lastly, the fifth group left out from the previously mentioned federal borrower assistance is the parents of borrowers.

The IBR and Pay as You Earn programs are designed to address the financial hardship experienced by borrowers during the recent economic recession.

Loans such as Parent Plus loans, however, were not included in these plans and the holders of these loans probably needed the most help – mostly because they already had established their debt prior to the economic downturn.

Considering parents often cosign for their children’s private loans, this group is quite burdened and disregarded by the recent federal repayment revamps.

The Good News

The good news is that prior to the IBR and Pay as You Earn programs, there were already many established repayment assistance programs available, and they still exist today.

These options include, but are not limited to, deferment, forbearance, consolidation and Interest Sensitive Repayment options.

The Pay as You Earn and Income-Based Repayment programs are the most talked about in today’s news, but if you find yourself in one of the groups left out of qualifying for them, look deeper into repayment planning and consider consulting with an expert.

Jan Miller is a student loan consultant & founder of Miller Student Loan Consulting, the first & only company devoted to giving borrowers customized student loan repayment plans that fit their budget & life. EMAIL: info@student-loan-consultant.com