Sandwiched Between Aging Parents and College Graduates Who Can’t Find a Decent-Paying Job

The economy seems to be on everyone’s mind. In June, especially, college graduates and student loans occupied much media attention. If your child graduated with student loans and you also have responsibility for aging parents, to say you may have stress could be an understatement.

There is free help for government (eg. Stafford–subsidized or unsubsidized–but not private) loans that can most likely relieve or solve (depending) the repayment problem. The following information is courtesy of a friend/colleague/expert, who developed the no-longer-in-effect Direct Student Loan Program for the Clinton administration. It applies to college graduates (from 2 or 4-year institutions) who either have no job or have a low-paying job. Since I’ve been giving this information to recent grads, I’m thinking it could also alleviate some stress for those sandwiched between helping aging parents and college-educated, in-debt children.

It’s called the Income-Based Repayment Program and–here’s my friend’s guidance verbatim:

This is about paying your loan when you are unemployed or at a low income position and graduated college

 LOW INCOME JOB

 You are probably eligible for an “Income based repayment plan.” This plan revises your repayment as a percentage of your income.  If you earn less than $17,000, you pay nothing.  Contact the financial aid director at your University to arrange this plan

UNEMPLOYED

If you are unemployed, contact your financial aid director and you will get forbearance. 

You must do something such as the above or you will be declared a defaulter which will cause you permanent financial hardship such as no credit card, no car loan, no mortgage, no tax refund, etc until the loan is repaid.

Switching to the repayment program if/when lowish income qualifies, should not be a problem as long as you’re not in default. The financial aid officer should be able to arrange a switch to the repayment plan for you. If for some reason, the financial aid officer can’t, contact the Federal Financial Aid Student Unit to get the number for the  Government Customer Service Unit. (Note: Graduate school loans do not qualify.)

This is a government free service that evidently few graduates are made aware of. It’s available to grads–regardless of how long they have been out of college–with outstanding government loans–not in default

When we have less stress we have more energy. Any time we can reduce stress, in this case by using information to make our adult children’s government loan obligations manageable, the ripple effect should make us more effective as we try to help parents age well.

Additional resource: Begin with line 9 if you don’t want to read the entirety of http://www.candofinance.com/student-financial-aid/student-loan-forgiveness/

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