Money Matters: Student Loan Modification

SIOUX FALLS, SD - The average student loan debt for a graduating senior is just under $24,000.  With jobs scarce and good paying jobs even more limited, paying back those loans can be a challenge.

Mark Olson graduated from college three years ago with $24,000 in student loan debt.

"I started paying on them and it was obviously a big weight to carry, kind of struggle the money I had to pay right out of college with my first job," Olson said.

The nearly $300 a month in payments limited his lifestyle. But when he got a job as a credit counselor, Olson learned a way to reduce his payments through the Income Based Repayment Program.

"It allows people to take student loans and put into a program that is income-based and they can look at reducing that payment," Anita Nesiba, a certified student loan counselor with Consumer Credit Counseling Service, said.

The fact that Olson has two young children really made a difference.

"Fortunately for me, my payment ended up being zero for now and they evaluate my income every year," Olson said.

Plus, Olson works for a non-profit, which qualifies him for government student loan forgiveness after 10 years of payments.

"As long as you're working for a non-for-profit, you can count those payments if they are in the direct loan repayment from October of 2007," Nesiba said.

Student loan debt forgiveness after 120 payments also applies to people working full time for government, tribes or schools. For Olson, his payment modification and knowing there's an end in sight is helping him plan for the future.

"My wife and I are able to save money for other expenses and save for emergencies and pay out of pocket instead of taking on more debt to cover them," Olson said.

There's no getting out of government student loan payments, even through bankruptcy. If you don't work out an income-based repayment plan, and don't pay, your wages may be garnished, your tax return taken or eventually money can even be taken out of your social security checks.



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