The time when students could simply enroll in college, show up, get free books, get their degree, and head out into the world are long gone. While this may have been the case thirty years ago, it is now commonplace for the students of today to finish their college programs owing tens of thousands of dollars in education costs. These amounts of debt are not insignificant. Even though student lenders can be more accommodating than many others, debt is debt, and the more you have, the more it will work against you when it comes to your credit and future expenses. Thatís why anyone with student debt should pay close attention to exactly that they owe and the best ways to go about paying down whatís been borrowed.
1. Find out Where You Stand
As soon as you graduate, or a bit before, you should look into the details of exactly what loans you have taken out in your name and when the payment dates are scheduled to begin. This will allow you to make a proper financial plan to cover them. Most federal loans come with a grace period of 6 months. Private education loans are all different, so check out your promissory note for upcoming payment dates.
2. Look into Consolidation
Consolidating your loans is a big decision. Consolidation basically combines any education loans that you have taken out and puts them together under one interest rate. When you consolidate, you will only have to make one monthly payment that will cover a designated amount for all your loans. This also locks in an interest rate that wonít change. The only problem is that consolidation does lock you into a particular rate. Make sure to do research on the best interest rates and when rates may go down before consolidating.
3. Get the Right Payment Plan
In order to set yourself up for successful repayment of your loans, you need to figure out which type of payment plan will be best for you. Some plans are set up to be graduated, which means that payments will start out very small (this is great for unemployed students straight out of college) and will gradually increase over time (hopefully as the studentís income also increases). Other payment plans simply designate one payment that will be made in the same amount each month until the loan has been paid off. Others start out larger and slowly decrease. Pay attention to the date of your required payments. If you know you will be getting paid on the first and fifteenth of every month, but your payment is due on the 30th, see if you can get it switched to match your incoming checks.
4. Search Companies That Reimburse Tuition
There are many employers out there who try to recruit recent graduates in top fields by offering to reimburse tuition costs is they sign an employment contract for a year or two. This may not be your dream job, but if you have very high student loan debt, it may be something worth considering.
5. Sign Up for Automatic Payments
Regardless of the amount of your loans or the type of payment plan you decide to use, if you forget to make a payment, then that will negatively affect your credit rating, which will be used any time you want to make future decisions. Your credit rating will be checked when you rent an apartment, buy a car, or even apply for a mobile phone contract. Make sure you are prepared to cover the cost of your payments, and go ahead and schedule automatic payments right after graduations o you donít fall behind.
6. If youíre in Trouble, Ask for Help
While private lenders are not always as forgiving, approved federal student lenders, like Sallie Mae, will not default your loan until you are at least 270 days behind schedule. You may fall into delinquency before that time, which will hit your credit a bit, but education lenders tend to allow for some padding before they run your credit through the ringer. In fact, many loan providers will allow graduates to apply for loan deferment. This means that your loans payments will be temporarily put on hold if you can prove that you do not have the means to cover them. If you are having trouble dealing with your loans, donít hesitate to call your provider and ask about options to get help.
This is a guest post by Nadia Jones who blogs at online college about education, college, student, teacher, money saving, movie related topics. You can reach her at nadia.jones5 @ gmail.com.
Image courtesy of imagerymajestic @ FreeDigitalPhotos.net
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