Congratulations, you just graduated college!  Now you’re $24,000 in debt!  That is, according to the Federal Reserve Bank of New York, the average outstanding loan balance, with 10% of borrowers owing over $58,000.

Some graduates are able to land a good paying job right out of college and pay them off without any problems.  Some graduates are not.

Different experts offer different advice for paying back your student loans:

    • treat the loan like a mortgage
    • create a 3-5 year plan
    • establish your own college repayment fund
    • start early with a part-time job in college
    • avoid the usual traps
    • max out federal loans before using any private loans
    • pay down your principal
    • check out programs like public service loan forgiveness to see if you’re eligible
    • enroll in income-based repayment (IBR) if your payments are too high to manage
    • if you’re already in default, try loan rehabilitation

These are all very good tips to pay and manage your student loans. However, there’s still a problem.

Student loan default rates rose steadily from 4.6% in 2005 to over 10% in 2011, according to federal data.

Justin Draeger, president of the National Association of Student Financial Aid Administrators, thinks he knows why.

“The majority of people who are defaulting have characteristics in common:  They have dropped out or stopped out of school.  They probably didn’t go through the counseling that’s available to them before graduation,” he said.  “They may not be as vested in repaying their student loans because they feel they didn’t get the education they deserved.”

Here at Darrell Castle & Associates, we don’t want students to be discouraged to continue their education in pursuit of their dreams because of money or the fear of not being able to pay student loans. We also don’t want graduates to feel as though their education was a waste and now they’re in debt for no reason.

The tips offered above are helpful, and they can work.  However, for some of you reading this, these tips may not work for you because you’re already too far in debt after defaulting on your student loans. We’ve built a solid reputation as a bankruptcy law firm Memphis, TN clients recommend. This debt may be overwhelming you and affecting how you live your life.

We have news for you, and relief.

Student loans can be included in a Chapter 13 bankruptcy.  A bankruptcy can allow you to either delay or reduce your payment obligations.

A bankruptcy is nothing to be afraid of.  In fact, with the right attitude, you can ultimately come out a lot better than you went in.  A bankruptcy can be your chance to pay off your debts, start fresh and re-establish and rebuild your credit the right way.

At Darrell Castle & Associates, we even offer a free 14 week program to help you with that, called “7 Steps to a 720 Credit Score.”

If you’re struggling to pay back your student loan debts and you’re considering bankruptcy as an option, please contact us today, either online or by calling us at (901) 327-2100 and one of our experienced attorneys will be happy to speak with you, free of charge.