Negotiate Student Loan Debt

College teaches nothing about how to negotiate student loan debt. Even graduates with doctoral degrees are dunces when it comes to confronting lenders about how to whittle down college loans. Studies indicate that most students graduate from college owing more money than they can make in the first two to three years of employment. Years of borrowing for a higher education can add up to even more years of finding funding to pay for it all. And top paying careers may be just as elusive as the memory of a sophomore year sock hop! But financial strategists offer plans to help graduates negotiate student loan debt down to manageable sums. Debt negotiation, especially on larger delinquent amounts, is something most consumers should not attempt to do on their own. Money managers recommend that students consult with professional debt negotiation firms, many of them available online, to arrive at a legal settlement with lenders.

Financial planners and counselors can take the heat for college graduates and effectively negotiate student loan debt without breaking a sweat. The advantage of dealing with a third party in debt resolution is that the professionals can field creditor calls and stop students from being harassed. Counselors can also assess a graduate's ability or inability to repay loans and work out an acceptable plan with creditors to break delinquent amounts into smaller increments. Creditors, especially government lenders, such as the U.S. Department of Education, will accept a payment plan with reasonable terms to give grads a chance to get a good paying job and accumulate resources to honor financial obligations. Some lenders may be willing to take small payments initially and increase those payments as graduates gain lucrative employment.

Lenders reason that graduates have been privileged with liberal financing for four to eight years, and usually within three post graduate years it is simply time to pay up. But shrewd negotiators can demonstrate the student's financial status and negotiate student loan debt repayment with reasonable terms. Just as negotiators act as mediators between graduates and creditors, so is Jesus Christ a mediator between man and God. "For this is good and acceptable in the sight of God our Saviour; Who will have all men to be saved, and to come to the knowledge of the truth. For there is one God, and one mediator between God and men, the man Christ Jesus; Who gave Himself a ransom for all to be testified in due time" (I Timothy 2:3-6).

Legal arbitrators hired to negotiate student loan debt may also recommend a strategy for students to gain control of indebtedness by clearing up other smaller accounts. College students are notorious for credit card abuse. Some graduates may own as many as a half dozen charge accounts for everything from clothing and books to food and fuel. But life after college cannot be managed with a credit card. Negotiators may advise graduates to pay off high-interest credit card debt in order to free funds for repaying lower-interest student loans. Charge card interest is treacherous and can compound the original purchase cost by 15% to 24% annually. A pair of $30 jeans could easily wind up costing over $100 when interest rates and late charges are added in. And while paying with plastic and making minimum monthly payments is the norm for students, the cost of mismanaging a charge account can be debilitating.

Once graduates pay off outstanding charge accounts, financial counselors can negotiate student loan debt to mediate a settlement or manageable monthly payments with lenders. A wise recommendation is to take the money that was used to pay off charge cards and begin applying those same amounts to student loans. Consistent, timely payments can help build a reputation for creditworthiness with lenders and establish a rapport with bankers and financial institution officers which can come in handy for future financing opportunities. Students who still have trouble managing charge accounts may be able to utilize financial counselors to help work out a reduced interest rate with card issuers.

Graduates may be tempted to forego hiring professionals to negotiate student loan debt; but the obligation just won't go away. The longer grads fail to address the issue of indebtedness in pursuit of education, the longer and more expensive the loans will become. Undergraduates should consider attempting to address loan repayment before graduation; and if not before walking across the stage, certainly before considering marrying, owning a home, or starting a family. An unpaid college loan is like an albatross hung around the neck, sometimes taking an occasional bite until it gets the grad's attention. The best recourse is to engage professional counselors to help fight the battle of indebtedness; or make provisions to repay loans before they can get out of hand and grow by mammoth proportions. The process may be slightly painful at first, but the rewards of beginning repayment efforts are well worth the initial agony.

Newly employed college graduates may consider taking out an allotment from weekly paychecks to help repay student loans. Financial counselors may suggest automatic bank drafts to creditors to negotiate student loan debt. Most lenders will jump at the opportunity of consenting to employee allotments or automatic drafts and may reduce interest rates if they are assured of repayment. Professional money managers can also provide college graduates with a firsthand education on personal financial management. Counselors may suggest developing a budget which includes regular living expenses, such as rent and utilities, food, vehicles, insurance, and of course, student loan payments. It is surprising how many people, even college graduates, don't know about maintaining and balancing a personal budget, but it's never too late to learn. Once students understand the basic principles of money management, they can graduate to higher levels of financial responsibility, including paying off student loans.

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