Help Paying Your Student Loan Debt

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College seniors typically pay a visit to their academic advisers in the final weeks before graduation to make sure they have enough credits to get out. They might be better served by dropping by the financial aid office.

Statistics say that at least 60 percent of graduates borrowed money to get that degree – in some cases, LOTS of money – and lenders want it back.

Most will give you six months to start paying. If you don’t  pay up . . . well, trust me, you DO want to pay.

Student loans do not go away. They follow you everywhere, and it really doesn’t matter whether you do or don’t get a job right way, whether your parents do or don’t front you the first few payments, or whether some friend/spouse/relative is generous enough to contribute to the cause.

Lenders don’t care about excuses or circumstances. They want their money, period. You ignoring the debt will not make it go away.

Student Loan Questions You Should Ask

That’s why, if you did take out student loans at any time in your college career, you really need to see a financial aid officer before you graduate. Gather as much information as you can. At the very least, ask for help with these questions:

  • How much do I owe?
  • To whom do I owe it?
  • What are the repayment terms?

The average college graduate leaves school with loans totaling $27,253. Most loans (85 percent) come from one or more of the federal programs (Stafford, Perkins, PLUS). The other 15 percent from private lenders and usually involve a bank.

For federal loans, you can go to the National Student Loan Data System website to find out how much you owe and where to send the check.  Private loans require that you contact the lenders individually to find out the same information.

As for repayment terms – meaning what interest rate am I paying and how long do I have to pay the lender back? – those vary and might be something you can negotiate.

Consider Consolidating

For students who took loans from a few lenders, the first step might be to consolidate all the bills in one place, with one lender. That is one of the options available for the 85 percent of student borrowers who took out federal loans, and certainly the easiest way to keep track of things. You might even end up with a better interest rate, and you could extend repayment to a maximum of 30 years.

If you choose to consolidate your federal student loans, you become eligible for the Teacher Loan Forgiveness Program and Military Benefits option. Both of those could be helpful in the repayment process, especially if you’re not able to get a good-paying job right away.

There are four other repayment options on federal loans: standard repayment (minimum $50 a month for up to 10 years); extended repayment (up to 25 year payback period); graduated repayment (lower payments first four years, higher the last six); income-based repayment (based on salary, could last 25 years).

If you have a private loan, contact the lending institution and ask if there are options. Most lenders want to make it affordable to repay loans, but the amount of flexibility they have does vary. Be aware that you can’t consolidate federal and private loans together.

The key is to know what you’re up against before you pick up that diploma. Visit your financial aid counselor or a financial adviser for help in sorting through the options. Use a debt calculator to determine the monthly payment for each option, and be sure you can handle that with what you expect to make at your first job.

Just don’t ignore your obligation.

Being late with a payment (90 days or more past due) is a bad thing, but if you at least send some money, it will help.

Being delinquent (270 days or more past due) is worse:

  • Collection fees could be added
  • Your wages could be garnished
  • Tax refunds could be seized
  • You lose eligibility for federal aid
  • Your credit is affected in going for home or car loans
  • You may be denied a job because of poor credit

In short: Know who you owe, how much you owe them and when the payment is due.

Then pay it.



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