Congratulations! You graduated from college! After the ceremony, parties and excitement have wound down, and you’re settling into your new situation, you may find yourself reflecting back on college life. If you were the average college student, part of your college experience included accumulation of student loan debt. Here are some tips that might help you prepare for the loan repayment process.
Check and Double Check your Student Loans
While you were in school you probably got a lot of letters and emails from your financial aid office and lender stating how much you borrowed in loans and information on the interest rate. Now is a good time to pull them out of their hiding place for the past few years and review them. Most likely you recently went through something called “Exit Counseling” either via a letter or sitting down directly with you college financial aid office. During this time you should have gotten the total amount of any federal loans that you took out during your time at that college. Make sure the amount that it is stating matches up with what you took out during your time in school.
Keep in mind that during Exit Counseling schools will only review information about your federal student loans, like the Direct Stafford Subsidized or Unsubsidized. If you took out any private student loans they won’t be listed. Make sure if you took out both federal and private student loans that you review the amounts for both. Also, Exit Counseling will only go over the loans that you took for that school. If you switched schools make sure you review the loan amounts from any of your previous colleges. (Check out NSLDS.ed.gov for a review of your federal financial aid history)
Find Out When your First Payment is Due
After you have reviewed the amounts make sure you know when your first payment is due. For most students this will be 6 months after your graduation date. At some schools your graduation date may be different than your graduation ceremony date! It’s important that you check with your school’s financial aid office if you have any questions about your grad date or when your repayments will start.
If you stopped attending school for a period of time, this can change when your first payment is due. Summer breaks and winter breaks don’t count as long as you were still enrolled in school, but if you withdrew from school for a time; don’t be surprised if your first payment on your student loans is due earlier than 6 months. Always check with your lender or financial aid office if you have any questions on this.
Review your Repayment Options
There are many different types of repayment options for federal student loans. All students are set up with the standard repayment option which is typically a 120 month term (loan talk for a payment once a month for 10 years). If you think that it might be a bit too steep for you; though, call your lender to see what else they offer. There are extended repayments, (lowers your monthly payment but you take a longer time to pay it off) graduated repayments (you pay less in the beginning months but every two years your monthly payment increases) income contingent and income based-repayments (flexibility in payments if your loan payments are high but your income is low). If you want more info on any of these repayment options call your lender to see if you would qualify.
Can’t Pay Back Student Loans?
Everyone has had to start out on their own and the road isn’t always smooth. Cars break down, jobs are lost, or people get sick. In general, life happens! When it does, know what your options are if you can’t pay. There are deferment and forbearance options for your student loans if you find yourself getting rained on without an umbrella. For many people (including myself!) this can make the difference in getting through the storm and keeping your sanity; and credit, intact. If you think you might be in a situation where you really can’t make a payment, call your lender ASAP to see if you qualify. It’s important that you do this as soon as you can so you avoid getting hit with late payments, show a missed payment on your credit report, or default on your student loans!
Graduating and going out into the real world is such an exciting and fun time. Nothing feels better than facing the world on your own and a good budget and a handle on your expenses can help. But there’s no shame in dinner at your parents’ once in a while…it sure does beat macaroni and cheese!