College is one of the most fulfilling and exciting experiences for many people. It is a time filled with challenging classes, friends and football games, and the endless quest for knowledge. After graduation, you feel like you could take on the world! That is until you receive notice that your student loans will soon be in repayment. Congratulations – you have the degree you worked so hard for — but now you have to pay for it. For many college graduates it can seem overwhelming, but it is important to face student loan repayment head on.
Breathe. You are not the first student to face repayment of student loans, and you will certainly not be the last. The first thing you should do is take a deep breath, and understand that there are many resources out there to help you through this process.
Plan for repayment. It is important to understand that your student loan payments will begin 6 months after your last class. Not only does this give you time to choose the best repayment option, it gives you time to plan to start making your payments. Use this time to get organized, ask questions, and understand all of the details and expectations of your repayment plan.
Understanding what you owe. Throughout the borrowing process, keep track of all of your loan paperwork. This will create a level of organization that will make it much easier for you when it is time for repayment. This paperwork will not only provide you with detailed information about how much you owe, but also who you owe it to. It is not uncommon for graduates to owe money to more than one borrower, so it is important to understand repayment options and expectations for each one.
Understanding how to avoid default. It is important to understand that you must make regular payments on your student loan. If you do not, you will go into default. Federal Student Aid explains, “Default means you failed to make your payments on your student loan as scheduled according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan”. It is very important that you do everything you can to avoid default. If you have trouble making your payments, reach out to your loan servicer and discuss your options. Additionally, scheduling an automatic payment each month will help ensure that your payment is consistently made on time.
Choosing the right payment plan. When it comes to repayment options, do your research and choose the option that works best for you. From traditional to income-driven plans, consider the (1) Timeframe for repayment, (2) Monthly payment amount, and (3) Interest paid during repayment. Federal Student Aid, an office of the Department of Education provides an excellent website that takes a detailed approach to explaining each of the repayment plans. If you are still unsure about which plan to choose after reviewing your options, contact your loan servicer and they will be able to answer any questions that you have.
Qualifying for loan forgiveness. The Federal Student Aid website provides information for those who feel they qualify for federal loan forgiveness. For many, involvement in established governmental programs, as well as certain teaching, legal, and medical services can qualify them to have their loans canceled, discharged, or forgiven. If you feel that you may qualify for this option, review the information listed at the attached website, and contact your loan servicer with any questions.