DETROIT — Grabbing a job, any job, is one way many college graduates grind it out in this tough economy while waiting to make it in their chosen field.
But earning just any paycheck won't cut it when it comes to paying everyday bills — and paying off thousands of dollars in student loans.
So what do you do? Can you delay those loan payments?
Grads having a tough time paying the bills need to know that there are options. But they need to review the rules of available programs to make sure they are not creating an even bigger problem later.
If payments are delayed, the interest keeps building on the initial loan — and graduates will be paying interest on top of interest.
A $25,000 debt could easily turn into more than $30,000 at the end of three years in forbearance, said Mark Kantrowitz, publisher of Fastweb.com and FinAid.org, websites that provide information about scholarships and student aid. Over the life of the loan, the cost could be nearly $42,000.
But many recent college graduates who find themselves underemployed or even jobless have to do something to keep from going into default.
If you owe far more in college debt than you're likely to see in an annual salary for many years, there is an income-based repayment plan that assures a borrower never has to spend more than 15 percent of discretionary income on loan payments. In 2014, the rule changes to 10 percent.
Discretionary income is defined as the amount by which the grad's adjusted gross income exceeds 150 percent of the poverty line for the graduate's family size. This year, that's $10,830 for a one-person household.
The monthly loan payment is adjusted annually, based on changes in income and family size. For some grads, a monthly payment can drop by $200 to $300 — or even to zero in the case of a single grad with no children, a $10,000 annual income and $25,000 in debt from loans
