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Student Loans and You

Over 40 million Americans have an average student loan debt of $30,000.00. Because they are unemployed or have income below the poverty line, 28% of borrowers are unable to make payments on their student loans. It is important to be aware of all the effects, advantages and disadvantages of taking out a student loan.

If you are only thinking about attending college, think carefully about whether your degree is likely to land you a job with a high enough salary to be able to repay your student loans. If you are already in college, having a part-time job may allow you to set some money aside to help pay for the loans after you graduate or pay some of the interest on the loans while in school. Consider other options to save money while in school: cook at home instead of eating out, look for more affordable housing, buy or rent used textbooks. Finally, stay in touch with your financial aid office to see if you qualify for any grants and financial aid.

If you are already out of college and have student loans, here is some important information to keep in mind. Your lenders are ready to collect on the loans as soon as you are out of school, and they will. The Federal government can garnish up to 15% of your weekly pay or 30 times the hourly minimum wage – whatever is less. The government can also capture your tax refund or send your loan to a collection agency.

If you need to delay repayment or temporarily stop making payments on your federal student loans, check here to see if you are eligible for a deferment or forbearance. If you have other loans, contact the lender about income-based repayment programs to help you set up a more appropriate payment plan. They are required to set you up for whichever repayment plan you qualify.

If you are struggling with making regular payments on your student loans, here are some resources to help educate you on your options.

  • Equal Justice Works offers a free informational webinar that explains how you can reduce your monthly student loan payments and qualify for Public Service Loan Forgiveness. You can register for the webinar here. They also offer a free e-book entitled “How to Manage Your Student Loan Debt While Pursuing a Public Interest Career” which can be downloaded here.
  • Visit the Federal Student Aid website for information on how to repay your loans, loan consolidation, forgiveness and discharge, and more.
  • Check out our free resources on student loans, financial education, financial aid scams and more.

Remember, with very few exceptions, both federal and private student loans must be repaid. In many cases, you cannot fully discharge them in bankruptcy. It is important that you make timely payments, and if you are unable to do so, that you seek help. South Carolina Legal Services may be able to help. To apply, please call our statewide Intake Office at 1-888-346-5592. You can call between 9:00 am and 6:00 pm, Monday through Thursday. We also have an Apply Online option for a limited number of legal issues: http://www.lawhelp.org/sc/online-intake.

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