Student Loan Repayment – made easy!

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Spring is giving way to the earliest stages of summer, and young, ambitious students everywhere are preparing to matriculate.  But, once the caps and gowns are packed away, new grads are going to have to prepare for a harsh reality - student loan repayment.  Crafting a plan to tackle student loan debt doesn't have to be hard or scary, but it does involve some due diligence.  If you're a graduating student about to start the repayment process, here are five baseline tips for staying on top of your loans.

Understand Your Loans

Most graduates leave college with more than one loan, so it's crucial to be aware of every individual lender. If you're not sure of exactly what's out there, visit the National Student Loan Data System. Here, you'll be able to learn about your federal loans, balance and repayment guidelines.

Non-federal, or private loans, will not be tracked here, so contact your lender or university for information on those.

Know Your Grace Period

Good news - you DON'T have to start paying loans right after you're handed the diploma.  Still, when it comes to federal loans, repayment comes quickly - six months post-graduation for Stafford loans and nine months for Perkins loans. The formula for private loans varies by lender, so reach out to them for grace period info.

Work Out a Reasonable Repayment Plan

Once you know what and when you're supposed to pay, look into what you can afford with your lenders. All federal loans are automatically divided into a 10-year repayment plan, no matter how much money has been borrowed. If that amount isn't something you can cover, don't worry - you can work with your lender to extend the repayment period beyond 10 years. This will, however, result in more interest paid over time, but many new grads find an extended repayment plan to be more manageable on entry-level salaries.

There's a boatload more to know about repayment options - forbearance, deferment, loan forgiveness, etc. - and you can learn about all of it via the US Department of Education

Consider Consolidation

Let's be honest - keeping track of lots of different loans and payment schedules is a tall order. So, to simplify the process, you can look into rolling all of your loans into one monthly payment and singular interest rate. The benefit to this, of course, is only having to remember and schedule one payment. But, choose carefully when it comes to mixing your private and federal loans together. By rolling your federal loans into a private consolidated plan, you'll relinquish government benefits like deferment and loan forgiveness. Sound tough? Don't fret; your credit union can help you wade through this process!

Pay Your Loans

As the cost of education goes up and up, it follows that those dollar amounts are getting a little more daunting. But, ignoring student loan debt is a big mistake that can affect your financial situation for decades to come. When it comes to federal loans, default takes place after nine months of non-payment. Another problem with default? At that point, the total balance of your loan will become due. This can have serious effects on your credit score, and even result in the federal government garnishing your wages. Don't make a manageable problem with customizable options something much, much worse - talk to your lenders and make those payments.

Education is a valuable gift you give yourself; don't cloud your future by struggling with your debt. Here at City County Credit Union, we're here to answer all your financial questions and keep you locked into a successful financial journey. Contact us any time!