Sometimes, thinking of people trying to pay their students loans, you actually will think of the younger generation. But for borrowers nearing retirement, it is more common to see 20 percent that are still paying their loans off. It is evident that people who are 50 years and above owe about $300 million outstanding loans.
It is kind of cumbersome for them because, of a missed payment, that will affect your credit ratings and if you stop payment for about six months you will attract severe consequences which includes your lender suing you, garnishing your wages, and keep a section or a percentage of your tax return. The number of student loan borrowers nearing retirement has significantly increased in the years.
The following are the steps they can take to accommodate their situation;
Look up for income repayment plan
It is normal for some loan holders to have limited incomes, and possibly get problems dealing with their student loans, the best they can do now is to sign you up for an income Repayment plan for federal loans.
Other income repayment plans are so conducive that they will let you reduce your payment to just 15 or 25 percent for a period of up to 20 years, what is left is forgiven. This program allows student loan borrowers approaching retirement will take care of their expenses and gives them a financial breathing.
It also makes the borrowers not to default their loans.
Sit down with financial planners
For the loan borrowers, if you know you are in debt and retirement is just around the corner, it is important that you sit down with a financial planner to discuss on how you can deal with the debt repayment.
They will keenly asses your situation and help you come up with a retirement debt payment budget, suitable for you. It is always advisable that if you are approaching retirement.
Focus on yourself not your children
Many parents want to lend a helping hand to their children with payment of their student loans, but how will they manage if themselves have an outstanding loan?
This calls for keen, strategic plans advised by your financial advisers. They should focus on completion of their loans first before embarking of helping their children paying their loans.
Being in debt while approaching retirement is something that scares many people. But this should not be a big issue for you.