According to the Federal Reserve, consumer debt in the US has approached a record-breaking $16 trillion. In the past few years, the four largest areas of debt growth have been mortgages, auto costs, credit cards, and student loans. It is still possible to pay off your debts, no matter how difficult your circumstances may be. There are numerous government and private programs that may drastically improve your financial situation.
We’ll discuss grants geared toward assisting people with debt, the Social Security Administration’s programs for those with disabilities, how to apply for financial assistance, and, despite that student loans seem out of control, how to approach subsidized or unsubsidized loans. Taking a good, hard look at your finances can feel overwhelming, but it can help you develop a clear, manageable plan – and that’s also not to be scoffed at.
How to Avoid Falling Into Overwhelming Debt
To understand any grants or programs, it’s crucial to understand how you can take control of your debt right from the start. Always paying off your credit cards in full is one of the most common advice. This means that you should never spend more than you can afford. We do get a grace period on our credit cards, but ultimately, we will have to pay that sum – or even more – back in full.
Though it might seem appealing to charge a large purchase and slowly reduce the cost every month, your finances may change unexpectedly. What initially appeared to be a good plan may turn into repayment issues and lower credit scores. You could also face legal troubles if you fail to repay the loan promptly.
Using various debt collection tools, the Social Security Administration recovered $2.2 million in 2019. To sum up, it’s important to determine whether you have to overpay and how much you need to overpay. A request for reconsideration can be filed if you disagree with the overpayment amount. Furthermore, if you meet the eligibility requirements, you may qualify for government benefits or a grant to help you repay your debt.
Subsidized vs. Unsubsidized Student Loans
It may have been necessary for you to take out a student loan or several student loans to complete your education to advance in your career. You should understand the differences between subsidized and unsubsidized loans, even if you have already borrowed the money.
You can qualify for a subsidized loan if you are an undergraduate student with financial needs. You may be aware that the amount you can borrow is determined by the institution you choose, and you can avoid paying interest on a subsidized loan for six months after you graduate. Usually, the interest accrues, proving to be an extremely practical option. Additionally, if you struggle to pay back your loans, the US Department of Education will pay the interest while you postpone your payments.
In contrast, you may qualify for an unsubsidized loan if you do not demonstrate what is considered “financial need.” You will find out how much you can borrow from your school regarding subsidized loans. Interest, however, will be your full responsibility – no exceptions. Over time, your interest will accumulate if you do not make your repayments. That’s why staying on top of your payments is so important.
Students can apply for grants to help repay their debt, many of which are free. Eligible students may benefit from the Young Farmers Loan Forgiveness Incentive Program offered by the state of New York. Students obtaining an undergraduate degree from an approved NYS college or university and agreeing to operate a farm in the state for a minimum of five years are eligible for loan forgiveness awards.
Grants to Pay Off Debt
Are you having difficulties staying afloat? There may be grants available to assist you with your debt repayment. It’s extremely important to read the fine print, as the grantor must fulfill their contractual obligations. If you are a registered nurse or a nurse practitioner, you can repay up to 85% of your student loan debt through the Nurse Corps Loan Repayment Program. Still, you must also work for two years at a Critical Shortage Facility or become a faculty member at an eligible nursing school. These industry-specific financing agreements come with their tradeoffs, but they are well worth the price for many borrowers.
There is a complete list of grants to pay off debt on the grants.gov website. It is important to remain vigilant against grant scams, which do not care how stressed you are (and vulnerable). The claim that they are government agencies, for example, is a scam because such a thing does not exist. Furthermore, you’re being scammed if they want to charge you for your free government grant. There is no processing fee for a grant you have already been awarded. When determining whether or not a grant is legitimate, the Federal Trade Commission (FTC) provides a handy list of guidelines. The key to improving your financial situation is understanding how to get grants to repay debts.
Other Tips for Paying Off Debt
In addition to paying off debt, you can stay on top of your finances by using other common methods. To start, it’s a good idea to check your direct debits and eliminate any services you aren’t using anymore. It may surprise you to find direct debits that have been overdue for cancellation for many years. A summary of your financial situation can help you reduce your outgoings.
You might also be able to save hundreds of dollars by switching your insurance. Most insurance companies offer better deals to new customers. It can sometimes be cost-effective to switch providers, even though loyalty goes long. Make sure you know when your insurance policy renews and switch if you can get a better deal elsewhere.
The debt you can’t manage – or debts that can’t be consolidated – may force you to consider bankruptcy. Petitioners can be either individuals or couples (or businesses). Creating an affordable repayment plan will assist you in getting out of debt. You should seek free debt advice before filing for bankruptcy since the process is rather complicated and could adversely affect your ability to rent or obtain loans.
Avoiding Free Money Scams
You may come across ads that offer a free list of debt forgiveness grants, either in the classifieds or online. Even though these are “money for nothing” offers, the Federal Trade Commission warns that consumers should not pay money to access information on free grants. Any source you cannot verify should also be avoided when giving financial information.
Newer scams involve scammers calling you directly to inform you of government grants you might qualify for. Grants are supposed to reward good citizens, but the government offers no such program. The caller will need your bank account information and $250 as a processing fee to deposit the alleged funds. If you want to consolidate your debts into one low-interest loan, a reputable lender or low-interest credit card is safer than a loan consolidation service. If you want to consolidate your debts into one low-interest loan, a reputable lender or low-interest credit card is safer than a loan consolidation service. If you want to consolidate your debts into one low-interest loan, a reputable lender or low-interest credit card is safer than a loan consolidation service.
Paying off large debts can be difficult, but it’s always important to be patient. Things typically don’t disappear instantly. Instead of living with debt, you should set long-term repayment goals and solid budgeting. You can take many steps to improve your financial situation, from checking your outgoings to canceling your direct debit. Consider talking to a financial advisor if you aren’t sure where to begin. It is important to inform your lender of your financial situation, even though money can be an awkward topic. Then they may offer you a range of repayment options more suited to your financial situation.
Are you interested in learning more about different grants and programs that can help you with your living situation? Check out the rest of Gov Relations’ blog section today!