Student Loan Repayment Tips for After Graduation

Posted on May 17, 2019 at 3:09pm by
student loan repayment tips

Federal Student Loan Repayment Tips

If you are graduating in May or June and have student loan debt, then you should have a repayment strategy in place. There are different rules for federal and private student loans, which means your strategy could vary depending on which types of higher education debt you carry.

The Department of Education offers multiple repayment options that may keep you from falling behind on payments.

Determine your Payment Amount and Make a Budget for Student Loan Repayment

You should determine your payment amount and make a budget first. This will allow you to determine whether you could experience financial hardship in the near future. Work with your school’s financial aid office to determine how much you will owe and when you plan to finish making payments. Once you determine these factors, work them into a budget with your other expenses. Make sure that your monthly payments are affordable. If they are not, and you have federal loans, consider enrolling in an income-driven repayment program.

Begin Making Student Loan Payments During the Grace Period

Depending on which type of federal loans you carry, you may have a grace period before you have to begin paying off your loans. You could use this grace period to begin making payments. All  loans will accumulate interest during this period, which should factor into your repayment strategy. Often times if you have federal loans and little income, you may qualify for a $0 payment which counts toward your repayment term.   

Know Your Student Loan Repayment Options

Several events may occur during your repayment period that could prevent you from making payments. For example, a job loss or major illness could make payments more complicated or impossible. You may have options to prevent student loan default during difficult financial situations. Look at which loan forgiveness and payment reduction options are available. Contact your student loan servicer or the Department of Education if you have questions. Law firms, such as ours, may also be able to help resolve your issues.

Use Automatic Payments for Student Loans

You could utilize automatic payments. Each month, your student loan servicer will deduct the amount owed directly from your bank account. Automatic enrollment could keep you from forgetting to pay. Just be sure to check what the monthly payment will be before your due date. In addition, do not forget to recertify your income each year if you enroll in an income-driven repayment plan. If you fail to recertify on time, then your loans will revert back to a 10-year repayment plan, which means your payment could significantly increase and lead to overdraft fees.

Collect Detailed Information About Your Federal Student Loans

You should know how to access detailed information on your federal student loans. Fortunately, this is a relatively easy process. You will need to gain access to the National Student Loan Data System (NSLDS). Your loan servicer may also have detailed information about your loans. Different types of federal loans require varying repayment strategies. You may be eligible for some income-driven repayment plans, but not others. By procuring this information, you can develop a more in-depth repayment strategy.

What About Private Student Loans?

Private student loans can be a headache, depending on how much debt you carry and your lender. It is far, far easier to default on private loans because you cannot take advantage of federal student loan programs that help prevent default. However, this does not mean you cannot make attempts to negotiate with your lender. You could inquire about changing your repayment plan, just do not wait until you have already missed payments. In addition, you may have refinancing options depending on your credit history.

What About Private Student Loan Bankruptcy?

Last but not least, bankruptcy is an option. It is a common misconception that student loans are non-dischargeable debt. Our law firm has helped a former students discharge private student loan debts when a hardship circumstance is evident.

If this is an option that you want to explore, then you should give us a call and speak with one of our attorneys. Call (816) 281-6349 or use our online case review form to set up a consultation.