By now you should be a few months into making student loan payments if you graduated from college in 2017. So, how is it going so far? Is it everything you anticipated it would be, and are the payments in an amount that is manageable for your budget so that you can pay for other components of your new adult life? Or are you already behind in making those monthly payments, and starting to receive the first of what are sure to be many past due notices or telephone calls from lenders looking for money?
As a person who is probably on your own financially for the very first time, it can become overwhelming very quickly. This could very well be your first test as an adult and you don’t want to fail it. Instead of ignoring the problem and hoping it goes away, the adult thing to do is take responsibility and work out a plan of action. Here are a few tips to help you tame the student loan beast:
• Bite the Bullet: Once you graduate from college, there can be an awful lot of temptations, especially if you get a job quickly. You might think about moving out of your parents’ house, buying a great new car, or taking a trip to Europe. But the best thing you can really do is to bite the bullet now, live as cheaply as possible, earn more money, and pay off a good portion of those loans. You’re probably still single, and don’t yet have heavy family financial responsibilities. So see if you can stay with your parents for a year, keep the old jalopy running, get a second job if you can, and make as big a dent as possible in that student loan total. It might feel a little constraining now, but it really could make your life a lot easier later on when you don’t have to worry so much about those loans.
• Know Your Options: Just because you get a notice from your student loan servicer about what you owe, you do still have some options at your disposal. If you really don’t have the available funds, or aren’t earning as much as you hoped, look into your repayment options. It is usually best if you can pay off your loans in the standard ten year period, but there are several repayment plans which offer longer repayment terms or payments that are based on your actual income. You may also qualify for some type of forbearance or deferment in certain situations. If there are just too many loans for you to keep track of efficiently, look into a loan consolidation option so that you will only have to make one payment per month on your federal student loans.
• Ask for Help: You are not alone in this process. The lenders have a vested interest in making sure you are able to repay your loans, so there is a good deal of help available to achieve that goal. Places you can look for help with student loan repayment include the holder of your loan, the financial aid office at your college, or the Federal Student Aid Ombudsman at 877-557-2575. This is a neutral and confidential resource of the U.S. Department of Education which is dedicated to helping you resolve any disputes related to your federal student loans. The Student Loan Borrower Assistancewebsite also has a variety of helpful resources for you. And don’t be afraid to ask your parents for advice. They have been dealing with money issues a lot longer than you have!
Try not to let your student loans go into default, as that can be the beginning of a long, downward spiral. It can make repayment even more unmanageable, and could affect your credit for years to come. Learn more about saving for college in my book, Secrets of a Financial Aid Pro, which also contains information on completing the FAFSA, applying for financial aid, paying for college, and repaying student loans. Order it now and learn how to take control of student loans.