More and more people are borrowing for their education. This can be a great option, or–as I’ve warned before–it can be a cross you’ll bear for the rest of your adult life. In addition to more people borrowing to pay for their degrees, more people are defaulting on their loans, with the default rate jumping from 5.2 percent to 6.9 percent in the past year.

The Depressing Reality of Defaulting
FinAid.org reports that, “Almost three-quarters of students who default on their loans have done so after withdrawing from school and failing to complete their studies.” To me, that’s just depressing. Not only are these people having to live with debt, but they didn’t even finish a degree. Hard times like those we’re facing only exacerbate the situation, making it more difficult to finish up school for working students.

Defaulting on a loan isn’t the only way, though. Forbearance and  deferment might be better options in the long run, and they don’t ding up your credit score like defaulting does. Both of these choices have requirements that must be met. Unlike deferments, forbearance can be arranged even after you’ve defaulted on a loan, which will get you on the road to cleaning up that credit score.

Have You Thought About Consolidation?
If you’ve got student loans, chances are that you’ve received bunches of consolidation offers. These, much like they appear, aren’t always on the up-and-up, so be sure to check a wide variety of options and rates out first. In these tumultuous times, you should probably opt for one of the more proven financial institutions, as well.