If you’re like most college graduates, you have student loan debt that weighs heavily on your mind. For students who graduated last spring, your 6-month grace period is up – and it’s time to face your loan payments.
But never fear: in this episode, you’ll learn how to manage student loan debt, and get details on 5 student loan repayment options that can help you ease your financial burden, and save money..
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Create a Student Loan Repayment Strategy
Did you know that the average education debt load is now about $30,000 per student? No matter if you can afford your education debt or are struggling to make payments, it’s important to have a student loan repayment strategy.
The first step is to get organized and understand what you owe. There’s a central database called the National Student Loan Data System (NSLDS) that tracks federal loan programs all the way from funding through account closure. But it doesn’t include private loans—so check your statements or contact your lender or school for information on those.
You can use a handy app such as Tuition.io or Student Loan Hero to aggregate your student loan information. Or create a spreadsheet with the following information for each of your loans:
- Type of loan, such as a federal or private
- Repayment date, which is when your first payment is or was due
- Interest rate and type, such as variable or fixed rate
- Servicing company that handles your loan and collects your payments (it may be different than the lender)
- Servicing company contact information, such as phone number and website
Having all of your loan information in one place will make it easier to choose the best repayment option.
What to Do If You Have Trouble Paying a Student Loan
If you have trouble paying your student loan, it’s very important to contact your loan servicing company as quickly as possible to discuss your options.
You probably know that if you don’t make payments or you pay late, that gets reported to the nationwide credit bureaus and will damage your credit scores. Additionally, legal action can be taken against you, including garnishing your wages and withholding your tax refunds.
Even if you have major financial problems and declare bankruptcy, student loans may not be discharged. That’s why student loans are a much more serious debt than many people realize.
But the good news is that you may be able to get some relief by changing your repayment plan.
See also: How to Use Upromise to Pay for College