What you need to know about student loans

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According to The College Board (www.collegeboard.org), a not-for-profit that dabbles in financial aid and scholarships, the average four-year state college cost for tuition and fees in-state is more than $8,000 a year.

For out-of-state students, an average $12,000 a year.

Private school, more than $28,000 a year.

Deanne Loonin, attorney and director of the nonprofit National Consumer Law Center's Student Loan Borrower Assistance project in Boston (www.studentloanborrowerassistance.org), told consumer resource Bottom Line Secrets magazine these are your options for managing a burdening student loan:

FEDERAL LOANS:

* LOAN DISCHARGE. A loan discharge completely cancels the remaining debt. Loonin said a discharge is an option if the former student works full-time for at least five years as a teacher in a low-income region or 10 years in some other designated public service.

Families can also seek a loan discharge in the event of death (of the student or parent) or disability.

"Bankruptcy itself does not automatically cancel or discharge student loan debt," said DebraAnn P. Brown, assistant director and counselor of the Student Financial Aid Office at The University of Memphis. "Students may also look into the Public Service Loan Forgiveness Program that the U.S. Department of Education has to offer."

* LOAN DEFERMENT. A borrower arranges postponing payment on the loan without penalty or accrued interest, as long as the loan is not in default. Potential qualifications: unemployment, receiving public assistance, working full-time with income below 150 percent of the federal poverty line, military service, graduate fellowship, part-time enrollment.

Brown added that a deferment also depends on whether the loan is subsidized or unsubsidized.

"Subsidized Stafford loans do not accrue interest while in deferment, but unsubsidized loans do accrue interest during deferment," she said, "just like they accrue interest while a student is in school."

For help on deferment options, go to www.studentaid.ed.gov, click "Tools and Resources," then "Federal Student Aid Forms," than drop down to "Managing Your Student Loans."

* INCOME-BASED REPAYMENT (IBR). An IBR will allow you to lower the monthly payment based on how high your debt is in relation to your income and family size. Consult your loan-servicer.

If your student loan is with a private lender, talk to your lender. See if the lender will re-negotiate your terms and ask about forbearance. Forbearance is essentially just like a deferment, except you still accrue interest.

Brown recommended these links for student loan assistance:

http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp

http://studentaid.ed.gov/PORTALSWebApp/students/english/OtherFormsOfRepay.jsp

For reducing the loan's interest rate:

http://studentaid.ed.gov/PORTALSWebApp/students/english/edebit.jsp?tab=repaying

http://studentaid.ed.gov/PORTALSWebApp/students/english/directconsolidation.jsp

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What you need to know about student loans - AmericaNowNews.com

What you need to know about student loans

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