Student loan debt is at an all time high. Nearly 44 million Americans owe student loan debt totaling more than 1.41 trillion dollars, that’s more than the total owed for credit card debt. It is the second highest consumer debt category, second only to consumer mortgage debt. One out of four (1/4) of the 44 million are in default or are struggling to stay current with monthly payments. The average monthly student loan payment for borrowers aged 20 to 30 years is $351. The average median monthly student loan payment for borrowers aged 20 to 30 years is $203. How can Americans enjoy life, build a future and live the American dream when they are struggling to stay current or have just given up and are in default. There’s help. Don’t loose hope. There are options and solutions that can loosen the financial noose around your wallet, ease the stress and put you back on track.

The options available depend on the type of loan. First, you must know whom you owe and how much. Generally there are two types of student loans: private student loans and federal student loans. Federal student loans are loans funded by the federal government. There are basically two federal student loan programs; The William D. Ford Federal Direct Loan Program and the Federal Perkins Loan Program. Private student loans are loans made by nonfederal lenders such as a bank, credit union, school or state agency. The terms and conditions of private student loans are set and governed by the lender, not the federal government. Between private and federal loans, the federal government makes most student loans. These federal loans are managed by one of nine companies: Cornerstone, Granite State, HESC/EdFinancial, MOHELA, Navient, Nelnet, Inc, Great Lakes Educational Loan Services, Inc, FedLoan Servicing, and OSLA Servicing. These are all private companies; as such they are all in business to make a profit. These companies may neglect to tell borrowers about deferment options, refinancing or alternative repayment plans. Although refinancing with a private lender is an option and could result in lower monthly payments, once a federal loan is refinanced with a private lender it losses any benefit available for federal loans.

The benefits and options for federal student loans include the possibility of lower payments, postponing payments, and under certain circumstances, have the loan forgiven. Your goal should be to pay your loans off by paying as much as you can afford each month, but not more than you can afford to avoid missing payments or unable to pay for basics necessities. If this is you and you find yourself in this position, here are a few options. Based on your monthly income, you may qualify for an Income-Based Repayment Play (IBR), an Income-Contingent Repayment Plan (ICR) or a Pay-As-Yo-Earn Repayment Plan. These plans are all different with different requirements, but one thing they all have in common is they look at your monthly income and then cap your monthly student loan payment at a fixed percentage of that income. There are other options available. The point is, there are solutions, however, simply not paying is not one of them.