It feels like student loans should be the last thing on your mind, but if you just graduated from college it’s time to start thinking about your student loan repayment options now. Don’t wait until the last minute to start finding out what your options are. That could lead to incomplete information and poor decision-making. Use the same research skills you obtained in college, and get a jump on the process.
The first thing you will need to know is whether you have private or federal student loans. If you only borrowed money using federal student loans you have a variety of options that can extend repayment periods or adjust payment amounts based on your income. Private student loan lenders will have their own repayment options, so you will need to work directly with them. Discover Student Loans, for example, offers a 15 year standard repayment plan for its undergraduate student loans.
In general, they will calculate your loan payments so that you will make equal installments every month for this period. If you have difficulty making these monthly payments, they have options to help temporarily manage your student loan payments, but you must contact their Repayment Assistance Department to determine if you qualify. Some of their options include:
• Early Repayment Assistance Program: If you are within the first three months of your repayment period and your Discover Student Loan is less than 60 days delinquent, you may be eligible for a three month extension of your grace period.
• Deferment: You may be eligible for a temporary postponement of your student loan payments if you decide to continue in school at least half-time, are on active military duty, serving in a public service organization or in a medical residency. Keep in mind that interest will continue to build during this period.
• Reduced Payment: If your Discover Student Loans are less than sixty days delinquent and you did not previously participate in a reduced payment program, you may be able to reduce your monthly payment to a minimum amount of $50.00 for an initial period of six months.
• Hardship: If you are experiencing extreme financial difficulty or have an excessive student loan burden, you may be able to reduce your monthly payment to a minimum amount of $50.00 for six months.
The key is to not ignore this financial responsibility. If you have any problems at all, you need to contact your loan servicer directly and learn more about the repayment options that might help you keep your loans current.
Get more tips on borrowing and repaying student loans in my new book, Secrets of a Financial Aid Pro. It takes you through the various types of college financial aid, covers federal and private student loans, explains how to search for college scholarships, and answers questions about how to talk to students of any age about money. Order it now, no matter how old your child is, and get the money discussion started with your student.