Repay Student Loans
Just as there was a great deal of consideration, time and work that went into applying for and receiving the funds to pay for your education, especially if it was a no cosigner student loan, a great deal of thought and consideration must be given to the aspect to repay student loans. This is because there are many options to consider, and many steps to take. Here are the guidelines that you need to know on repaying student loans.
You have a grace period. This is the time between graduating from college, or dropping below half time status, before you have to start making your repayments on your student loans. This grace period is six months if your loans are FFEL or Direct loans, or nine months for Perkins loans.
Typically, before graduating, you will have an appointment with your financial aid officer, and you will be counseled on repaying your student loans. This is referred to as exit counseling. You can also get exit counseling online through the FAFSA website.
You should be given all of the information that you need for repaying student loans, and you will most likely make several decisions regarding the student loan repayment process during this appointment. In the event that you do not receive exit counseling, you can visit the Department of Educations’ National Student Loan Data System or NSLDS to obtain information regarding repaying student loans.
You will need to choose a repayment plan. The choices are standard, extended, income based, income contingent, graduated, and income-sensitive. Different student loan repayment options are only available for certain types of federal loans. For example, the income contingent laws are only available for students who had direct loans, while income-sensitive repayment plans are only available to students who had FFEL loans. Your financial aid officer can give you more details about each type of repayment plan, which plans you are eligible for, and help you to decide which plan work best for you in repaying student loans.
There is one way to lower the amount of your monthly payment, and it is recommended that you use this method – not only to get a lower payment and save a bit of money, but also to ensure that you are never late with a student loan repayment. You can have your payments deducted electronically either from your checking or savings account, or with your credit card. This typically reduces the interest rate, and this is how you save money.
If you ever see that you are going to have trouble repaying student loans – even if you think you will be late on just one payment, you need to contact your loan administrator as soon as possible. This is the place where you make your payments. When you do this, you can figure out a way to stay in the good graces of the lender either by making a change in your repayment plan, getting a deferment, or forbearance, depending on your unique circumstances. The worst thing that you can do is ignore the debt, as this will put you into default status, which is very serious and your credit is adversely affected.
Repaying student loans can often be stressful, but there are always options if you talk to your lender openly. In many cases, a student loan consolidation can help ease the financial burden to repay student loans because of a lower payment.
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