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Student Loan Ranger: Grads Have Options to Manage Student Loan Debt

Families, friends, and colleges across the country have come together in recent weeks to celebrate the accomplishments of the class of 2012. And even as they cross the threshold and flip their tassels, many new graduates are preparing to undertake new hardships to manage student debt payments.

It seems these days we can't think of accomplishments like graduation without thinking of student debt. Last weekend's newspapers seemed to abound with articles on students' crippling debt and the resounding effects of student debt long after graduation. The New York Times even devoted its Room for Debate forum to the topic, Easing the Pain of Student Loans.

We've spent quite a bit of time lately discussing the declining investment in education, the need for more information, and ways colleges can help decrease risky borrowing, so we'd like to devote this week to graduates who are feeling the burden of student debt and concerned about how it will affect the future.

We've heard from many who are rightfully concerned about high monthly payments and the intense pressure of making these payments. And we want to remind you that if you are anxious about your ability to pay, there are options that may help ease your burden.
The Department of Education has different repayment plansavailable for federal loans. If payments under a standard 10-year repayment plan seem high and unsustainable, remember that you may not need to select this plan. Consider switching plans if you find your payments are too expensive. Check to see if Income-Based Repayment (IBR) or Income-Contingent Repayment (ICR) can help ease the burden.
IBR and ICR work differently than standard repayment plans because they base your monthly payment amount on your income. Rather than paying a high amount every month for 10 years and working two or more jobs so you can make these payments, under these plans your monthly payments for the year will be capped as a percentage of the income you are already making (20, 15, or 10 percent, depending on your circumstances).
IBR and ICR may increase the total amount you will pay than on a 10-year plan if you'll pay interest over a longer period of time, but they can help make payments manageable on a lower income. You can always switch to a standard plan or make additional payments if your income increases. (There is no prepayment penalty on federal loans, but double-check the terms of your private loans.)
Repayment options vary for private loans, so ask your lender whether there is something you can do if you cannot make your monthly payment amount. The calculators at can help compare short- and long-term effects of different plans and help determine what's right for you. 
If you are worried about the possibility of defaulting on your loans, there are additional options you may want to consider. If you are entering or considering a public service position, consider IBR or ICR, because they are qualifying repayment plans for Public Service Loan Forgiveness (PSLF) and can help make payments affordable while working toward forgiveness. 
To learn more about student debt and your options for relief, download our free educational debt manual and register for one of our free student debt webinars
Follow us on Facebook and Twitter (#studentdebthelp); we'll keep you updated on exciting news like the Student Debt Forgiveness Act of 2012, important initiatives to address student borrowing, and tips to help you manage your debt.
Radhika Singh Miller is a program manager for Educational Debt Relief and Outreach at Equal Justice Works. She has served on student loan committees in the Department of Education's negotiated rulemaking focusing on the College Cost Reduction and Access Act (CCRAA) and other debt relief initiatives. Radhika graduated from Loyola Law School Los Angeles. Prior to joining Equal Justice Works, she was a staff attorney at the Partnership for Civil Justice, focusing on constitutional and civil rights litigation and advocacy.
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