A Reason to Rejoice For the Student Loan Defaulters

bulram | July 18, 2012

Are you troubled about the defaulted loan status of your student loans? Then the student loan forgiveness act will surely be of some interest to you. It is true that the Act has not yet been passed, yet it is evident that it has become popular with the constituents. About a million people have supported the proposal.

The recent step that the government has taken regarding the freezing of the student loan interest rates at 3.4% for a year is not being accepted as a valid solution for the problem. Instead the forgiveness act is being conjectured to be a better solution to the problem.

However, there are concerns still about the new provision. One of them is the eligibility of the loan holders for the benefit. Since the Act has not yet passed so there is some confusion still. The Forgiveness Act will be applicable to Federal loan holders only. No relief can, therefore, be seen in the horizon for those who have a defaulted private student loan.

The student loans can be confusing for anyone who has not really researched the issue. It has a number of types and kinds and the names tend to differ from provider to provider in case of a private loan. therefore, one has to be precisely clear about the loans and the types before they even rejoice about the passing of the Act.

For the private loan holders all is not lost. If they hurry they might even strike a good deal with the provider. There are a number of repayment options that the private loans have, one of them is consolidation. Consolidating the loans is a good way to get rid of the loans by paying a lower interest rate. Even if the repayment time is increased and you might end up paying more at the end, the immediate burden of the repayment will be removed.

For the new borrowers the student debt forgiveness program has put a bar on the amount that is applicable for the benefit. This will reduce the abuse of the forgiveness plan that is being feared. Also, there are instances where the loan has been forgiven for people with disability. However, this is applicable only in the case of the federal loans. Again this benefit will encourage the students to attend community college and take lesser loan, since the forgiveness benefit will be given to those students only.