While a student is enrolled in school, their student loans can quickly accumulate into the tens of thousands. Once their education has been completed, the monthly payments can often be burdensome. However, by using a student loan modification, borrowers can reduce their student loan payments to make them more affordable.
Lack of Employment
A graduating student may not always find a job right away. Although there is normally a 6 month deferment period, the looming student loan payment can cause a lot of stress to an unemployed individual.
Even when students find a job, it is typically an entry-level position and does not offer the highest rate of pay. This can lead to a stressful life that involves a constant juggling act in deciding which bills are going to be paid one month and which ones will be skipped another month.
Changing Circumstances
Sometimes former students can manage their student loan payments until they face changing circumstances. For instance, a borrower may find their hours reduced, they can laid-off, fired or have other extenuating conditions. In this type of situation, a borrower would need to have a student loan modification in order to make ends meet.
Returning to School
Many students will work for a year or two and then decide to return to school to obtain a higher degree. This is usually the result of an employer-paid education programs that make it free to go to school. Yet, even when this occurs, the current student loan payments can become overwhelming when the borrower is working fewer hours in order to attend school.
How It Works
A student loan modification can result in a temporary extended deferment period, extended repayment period, an interest rate reduction or forbearance. This affords the borrower the ability to carry out their financial obligations to their student loan company, while also being able to manage their finances better. A student loan modification provides a viable alternative to delinquency and negative credit reporting.
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