Students should know about student loans, right? This topic seems quite applicable seeing as how nearly 60% of all college students borrow money for school annually. Unfortunately, there are too many who know too little about what happens to their loans post graduation. Do you?
A simple Google search can give answers. So that is where I started: typing “things to know about student loans” into Google. Pretty simple until the search throws back hundreds of different “things to know.” So, really, this is just to get you started:
Types of Loans
There are federal loans, private loans, state loans, PLUS loans, and consolidation loans and loans from your school (to name a few). Different loans carry different terms and agreements, so be sure to identify what type of loan you have first.
Check with your lender to identify your loan balance. After obtaining a balance, you can begin assessing what type of payment plan you would like. Different plans work for different people — finding a comfortable payment plan is essential to a healthy budget.
After you graduate you have six months until you begin repayment on a Federal Stafford Loan and 9 months for a Federal Perkins Loan. This 6 or 9 month interval is called a grace period.
A Federal Stafford Loan is a federal student loan for undergraduate and graduate students enrolled in college. Stafford loans have a fixed interest rate and are understood as the most affordable type of student loans.
A Federal Perkins Loan is a need-based student loan offered by the U.S. Department of Education to assist college students in funding post-secondary education.
Remember, a student loan is no different than any other loan. You have borrowed money that will be paid back with interest. Student loans accrue interest just as other loans do. It is even a good idea to start payments during the grace period, as this lessens the total before payments start being demanded. Don’t let interest cripple your savings.
What do you do if you’re having trouble paying back your student loan?
- Contact your lender (as soon as possible)
- Search for alternative payment plans, and/or…
- … Ask your lender about your options for a forbearance, deferment, or loan consolidation
Keep In Mind
There should also be a substantial amount of research before accepting a loan. There are many options for funding any education, so look for what works best for you.
Again, there is much more to know about loans and this article is only a short list of suggestions and tips for managing and understanding loans. Obviously there is more to know and independent research is heavily suggested to learn about your particular financial situation. Even if it seems overwhelming to begin, just start with a Google search. It’s a great tool. Be proactive and do some learning.