Student loan debt is second only to mortgages in the United States. (Shutterstock photo)

Student debt has reached staggering numbers in the United States, passing every other form of debt in the country except home mortgages. According to Face the Facts USA, an initiative from George Washington University, student loan debt has reached almost $914 billion. Not only has that number grown more than 275 percent in the last 10 years, 14 percent of that student debt is past due.

With more and more students unable to afford the payments on student loans, many universities and the federal government have developed student loan forgiveness programs which help lower or eliminate payments altogether.

What are the options if a student loan has been defaulted on?

If you have a student loan from the federal government, there are a number of options presented by The Department of Education to help work through the situation.

Just like a private student loan or a loan through a lending institution, the federal government expects student loans to be repaid, even if a student has fallen into financial difficulty.

The current options offered by the Department of Education include:

• Altering your repayment plan: A payment plan is usually assigned at the time the student loan is granted; however, students who are having difficulty are allowed to change their payment plan or schedule. Some options allow students to stretch repayment plans out 25 years.
• Loan consolidation: Just like debt acquired outside of school, the federal government allows students to consolidate debt. If a student is defaulted on a loan, however, there are certain requirements which must be met before consolidation can take place.
  

  There are a number of options for students having trouble repaying loans. (Shutterstock photo)

• Deferment or forbearance: Under certain circumstances, the government will allow students to postpone payments on a loan for up to 12 months or another predetermined amount of time.
• Forgiveness, cancellation, discharge of loan: There are certain reasons why the federal government will forgive a student loan, though simple inability to pay is not generally one of them. Circumstances for loan forgiveness include: death of the borrower, bankruptcy, school closes, were approved for a loan inappropriately, if you withdrew from school under certain circumstances, or if you are employed in certain public service jobs.
• New pay-as-you-earn program: The Department of Education recently announced a new program designed to help students manage debt. The pay-as-you-earn program offers low monthly payments and the potential for loan forgiveness after a period of 20 years.

What options are there for students who have taken loans from non-government institutions?

Defaulting on a private student loan is different compared to defaulting on a federal loan.

For students who are unable to make loan payments to non-government institutions or schools through which they borrowed money, loan forgiveness and repayment plans are often entirely up to the lending agency.

There are also independent organizations which offer loan options if federal forgiveness is not an option. An example of this type of organization is Stafford Loan Forgiveness, a program which offers aid to students who do not qualify for federal discharge.