College graduation has come and gone. All the caps and gowns have been put away, and it’s time to start thinking about repaying those student loans which helped you achieve your dream of a college diploma. Here are a few tips for the college class of 2014:
1. Make a List of Loans: First you need to find out just how much you owe. Visit My Federal Student Aid to view information about all of the federal student loans you received and to find contact information for your loan servicer. Private student loans are not included in My Federal Student Aid so you will need to put together a separate list of private student loans you took out as well.
2. Calculate Your Total Monthly Payments: List out exactly how much money you will be expected to pay each month. Use the Repayment Estimator to calculate your federal student loan payments under each repayment plan.
3. Consider Loan Consolidation: This means bringing all of your federal student loans together under one Direct Consolidation Loan, where you will only make payments to one lender each month. You might also be able to consolidate your private student loans. There are positives and negatives to this approach. You may lose some benefits, and could end up repaying more money in the long run.
4. Look at Payment Plans: To make your payments more affordable, repayment plans can give you more time to repay your federal student loans. They can also be based on your income.
5. Deferment and Forbearance: You may be able to temporarily postpone payments on federal student loans in order to avoid default. During a deferment, the federal government may pay the interest on your Federal Perkins Loan, Direct Subsidized Loan, and/or Subsidized Federal Stafford Loan. Forbearance could allow you to stop making payments or reduce your monthly payment for up to 12 months due to financial hardship, medical residency, illness, certain teaching programs, or military service.
6. Loan Disputes: If there is a discrepancy, you will need to identify the problem and contact your loan servicer.
7. Forgiveness, Cancellation, and Discharge: There are certain situations where it is possible to have your federal student loan forgiven, canceled, or discharged.
8. Keep in Contact: If you are having difficulty making payments, contact your loan servicer immediately and ask about what type of help is available for people in your situation.
9. Stay on Track: Student loan payments can get out of hand easily, especially if you have never been responsible for paying your own bills. Make sure you make timely payments.
10. Avoid Default: Failure to repay your student loans can result in financial and emotional hardship. After default, you could have less payment options.
For further information on steps you can take to repay your student loans, contact a professional College Financial Aid Advisor. Contact College Financial Aid Advisors (CFAA) or visit my About.com website, Paying for College.