Use all means at your disposal to get your student loans under control. Get ideas from sections in this website to reduce your loan repayment and interest charges to a minimum.
Student debt relief is right up there with finding a paying job right after the finals are over, the graduation ceremonies are finished and friends get scattered around to different areas of the country. Unless your loan is super small, student debt relief will be years in coming.
Student Debt Relief
If up until now you have had only a passing acquaintance and knowledge of loan repayments, credit reports and credit scores, you now have to take it all deadly seriously…because the banks that you borrowed money from and the federal government who you have borrowed money from are deadly serious about getting the money back that they lent you and in most cases with interest.
The federal government in particular is highly flexible with student loan repayment, offering a host of repayment options. But know this…if you try to default on this federal money they have lent you, the will haunt you, possibly forever. They will put tax liens on you, garnish your salary and even take Social Security money decades from now. And all of this will appear on your credit report and stay on it for between seven and 10 years and dramatically impact your credit score…to lower it.
What follows in this section are key tips to help you understand student loans, manage those loans, pay them back…all the while building your credit for a bright future..
Understanding All Your Loans & the Process
Pay Close Attention at Exit Interview on Student Loans
Pay close attention at your student loan exit interview. Students who borrow federal student loans are required to attend entrance and exit interviews about their loans. Listen closely at yours and take notes, because the information is invaluable and critical…you need to make your first payment on time.
Probably the key point to take away is information about the National Student Loan Data System or simply NSLDS. This is the website containing the U.S. Department of Education’s central database for all federal student aid. That includes student loans and information of student debt relieve. You need your Free Application for Federal Student Aid personal ID number to access the NSLDS.
Equally important to know: if you took out private student loans, this database will not have any of this information; you need to contact the lender. If you have lost the paperwork on these loans, get your free credit report. Your credit report will have all information on these loans. This is also a good time to look over your credit report to ensure that everything on it is accurate. At your exit interview, you will find out how to figure out all of the money you owe, what the monthly payments are likely to be and other information of student debt relief. For example, there are opportunities at this meeting to learn about public service student loan forgiveness programs and other student debt relief programs. This could be critical for you in helping you pay back this debt. The exit interview will also help you begin to devise a repayment strategy, furnish you with financial literacy tips…in case you were not a finance major…and give you service contact information.
Understand Your ‘Grace’ Period
Check your student loan grace period on all of your loans. On federal loans there is a six-month grace period. Your school is supposed to notify the feds within 30 days of you completing school. Many schools use the last day of classes, others may stretch it out a bit. If you graduate on May 25th, but your classes ended on May 12th, you may think you have until November 25th (the six-month anniversary) to make the first loan payment. If the school notified the lender on May 12, however, that payment would be due on November 12. If you are moving around, changing addresses, it is your responsibility to find out how long a grace period you have and when the payment is due. Make a chart of all of your loans and put in when the first payment is due and on what day of the month subsequent payments are due. Just because you do not hear from the lender about the grace period or when the first payment is due, it is still your responsibility, not theirs.
Familiarize Yourself with All Loan Details
Now that you are in the repayment phase of your student loan relationship, you need to get very familiar with all of the details about each and every loan, both federal and private loans. Look at interest rates charged, penalties for late payment, and more. If you have a variable rate loan, you need to look closely at how and when interest rates can rise. If at this reading interest rates are still low, do not be fooled. Interest rates and turn around and rise in a flash and make your monthly payments prohibitive.
Research Your Payment Options
While the payment options on the private student loans might be fairly straight forward–pay us our money at this rate or else! on federal loans you have a great many more options for student debt relief and you will want to take time to understand those options. Remember though, just because the federal government offers a lot of options and in some cases even debt forgiveness, when the amount you will pay them has been settled, they will be relentless and pursue you forever to get it. If you default on a student loan or declare bankruptcy and figure you can walk away from this obligation, the feds will remember you at your retirement and perhaps dock Social Security payments to get their money.