Saturday, May 22, 2010

Mountains of Debt

This is pretty discouraging, but I know that we can do it.

We can pay off this debt!

Fortunately all of my student loans are still within the grace period, and my wife's loans are currently in forbearance. Once the grace period on my student loans expire in July or August I will apply for forbearance on those, too. If you are not familiar with forbearance it is a good option for people that are struggling to make the payments on their student loan obligations. Essentially you contact your loan issuer and request forbearance, if granted you have a year before you need to start making payments. The catch is that during that year any interest that would have accrued is added to your loan balance at the end of the forbearance period unless you pay the interest during the year. This means that you will owe more at the end of the year than you do right now. This situation is good for us though, since it will allow us to focus our efforts on paying off our credit card sooner, which has a MUCH higher interest rate than our student loans. All of our loans are serviced by two companies: UHEAA and Fedloan Servicing.

For more information on forbearance with UHEAA click here (scroll down to the middle of the page.)

For more information on forbearance with Fedloan Servicing click here.

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