The overwhelming, heavy feeling weighs on you like a ton of bricks haunting you as you look for an entry-level job, medical career, management position, work-for-hire, or simply the real world. It’s like you’re racing the clock to obtain a source of income, whilst holding on the little money you actually do have to live, function, and have fun.
The student loan process is godsend when you are trying to pay for school, but transforms into Satan when you have to keep paying the devil –also known as Sallie Mae – for however many years until the repayment process is all said and done. There are several types of repayment plans. Research which one is applicable and best for you:
Income-based repayment plan
Standard 10-year repayment
Graduated repayment plan
Extended repayment plan
Scholarships, grants, and wealthy family members are great and all but the average person has to borrow loans for school. Paying them back, aren’t a joke though. As long as you know the stipulations behind the loans that you are borrowing, you can stay on track when repayment time comes. Knowing which types of loans you borrowed in the first place and their restrictions are possibly the most important part of the loan repayment process.
Here are some of the types of loans that students can borrow:
- Stafford loans are the most common federal education loans students receive. They can be either subsidized or unsubsidized.
- Perkins loans are low-interest federal loans, administered by the school, for students who demonstrate exceptional financial need.
- PLUS loans can cover expenses not met by other federal financial aid. These can be taken out by dependent students’ parents or by graduate students.
- Consolidation loans combine one or more pre-existing loans into one new loan with a fixed interest rate and (generally) a longer term.
- Institutional loans are non-federal aid that schools loan their students.
- Private loans and state loans are not federal aid—however; they can help students ineligible for federal aid or those who do not receive enough aid to cover the cost of attendance.
Obama Loan Forgiveness
This repayment option is another one, but includes several stipulations that the average loan borrower may not qualify. Visit www.studentaidcenter.com to see if you are eligible.
Deferment and forbearance are two ways to temporarily delay, postpone, or lower your loan repayment after the usual six month grace period. When repaying your loans, though, the amount you pay and the length of time will vary depending on the repayment plan you chose, as well the amounts of the installments you chose to repay. Here some steps you can take:
1. Repay your student loans automatically
2. Aim for 10 years to repay your loans
3. Stay organized and on top of loan changes
4. Know what the duration of your grace period
5. Pay off the loans with the highest interest rates first because most are not fixed, either way
6. Consider Income Based-Repayment also known as IBR
7. Stay on top of student loan developments
8. Contact the Federal Student Aid Lender
Also consider consolidating your loans and just paying your loans earlier than mandated. Paying for an education to, in turn, obtain a salary of some sort, can be ironic and extremely frustrating. Staying on track with repayment, obtaining a relatively well-paid job, and not borrowing more than you need in the first place are just a few of ways of softening the blow of loan repayment. Remembering that with all loans you borrow, that you need to make payments to your loan servicer, are critical to your credit report and overall debt. The repayment process differs for each loan though, and interest rates can also affect the overall amount of repayment as well. Visit www.fafsa.ed.gov or studentloans.gov. for more information on loan repayment.
Source: Eve Jane Clair
Eve Jane Clair is an online community run by three friends determined to highlight and discuss perspectives and passions of women of color. Visit them online at EveJaneClair.com. You can also follow them on Twitter @EveJaneClair and on Instagram @EveJaneClair.