Even though the government have programs to help students tide over tough financial times, it is important that you do not take them for granted. It is a debt that you have to repay promptly just like any other. And at times, you will also run into tricky periods where you are hardly making ends meet. There are some ways to reduce your payments to get temporary relief.
Debt consolidation for student loans
Many people may not notice it at all. But for students who are in debt, they might notice advertisements for consolidation services everywhere they go. But other than a tiny amount of savings I you are lucky, the biggest benefit that comes with consolidated student loans is that you will now only have to service one payment instead of multiple ones. This allows a borrower to eliminate the mess of keeping track on 4 debts. You can also possibly shrink down your instalments by extending the tenor.
On a mathematical perspective, it would only make financial sense to consolidate is when the current interest is higher than what the new lender is offering. But very few people will sign up for expensive education loans in the first place. This is really a niche market lenders in this area are targeting.
Deferment is exactly what it sounds like. It is basically an agreement with the lender to postpone the payment due. The deferment can go up to 1 year. But interest will continue to be charged if you are on an unsubsidized loan.
You would of course need to provide documentation to justify your reasons to make such a request from the lender. Just remember that this is not an entitlement and subject approval from the relevant authorities.
This can look like an alien word to many people. It basically means that you are allowed to miss payments without having to make up for it. It is like a gift or a goodwill granted to you. Again, you will need to justify why a lender should even entertain your request. You would truly have to prove that you are in deep financial problems to get this approved. Lenders are not charities and if they are to give these things out like candy, the whole system might come crashing down.
These programs work like a benefit you receive from your employer for your loyalty and commitment. The money might be disbursed pending milestones that has to be reached. For example, a certain sum promised for each calendar year. There are many such programs available from organizations from all walks of life. And they are especially prevalent in government agencies.
So if you must, you could consider joining one of those employers with such a program to take advantage of these schemes. And jump ship to pursue what you really want after the loan have be fully repaid or when you have maximized the usage of this benefit. They can commonly be found by those in the medical, educational, military, multinational corporations, etc.