Of the 20 million students attending college in the U.S. this year, 12 million use some form of student loan to cover their school-related expenses, according to American Student Assistance. The total amount borrowed in federal student loans is over a trillion dollars, making it the largest source of consumer debt in the United States.

The rising costs of college pretty much guarantee that you’ll have to rely on some form of financial assistance. While you’re in school, your total student loan debt is an abstract creature that doesn’t have much of an impact on you. Six months after you leave school, however, that debt becomes real. A recent deal signed into law by Obama takes some of the pain out of repayment, and there are a few other ways to keep your post-graduate quality of life high as well.

The Student Loan Deal

Student loan debt has been on everyone’s minds lately, including the government’s. The Student Loan Deal controls the interest rates of federal student loans. This deal set the current rates at 3.9 percent for undergraduates, 5.4 percent for graduate students and 6.4 percent for parent loans. No mater what interest rates do in the grand economic scheme of things, these rates cannot rise above 8.25 percent for undergraduates, 9.5 percent for graduates and 10.5 percent for parents, according to Time Magazine. The capped rates provide you with a way to predict your future student loan payments without having to worry about an out-of-control interest rate.

2 Repayment Options

The rates are great for lowering the amount of interest you pay overall, but if you’re already struggling to pay back your student loans, you need more immediate help. The job market for college graduates is improving, but nabbing a job in your field before the six-month grace period is still a challenge. If you’ve been sending out every online job application you come across and you only spend money on essentials—and all the rest of your money goes to your student loans—federal student loan programs have a few options, so you don’t have to risk giving yourself scurvy in order to make your loan payments every month.

• Income-Based Repayment: This method looks at how much you’re earning and calculates the student loan based on this figure. Instead of paying hundreds per month for a degree that you were unable to finish or in a field you’re unable to find work, the loans are scaled based on your income, family size and several other factors to make payments more affordable. Your payments are calculated every year to account for changes in your financial situation.
• Extended Repayment: Many students sign up for a 10-year payment period on their student loans. You don’t have to be locked into that time span, if it makes the payments too high; federal student loan programs allow up to 30 years for a repayment package, significantly bringing down the amount you pay per month (of course, the amount of interest you pay will increase).

Article and Image provided by: Desmond Daniels, BluefirePR