When you start your freshman year of college, one of the first things on your mind is likely student loan debt. After all, tuition is already expensive enough, and you don’t want to add more on top of that! If you’re like most students, you may not even be aware of all the options available to you when it comes to student loans. In this blog post, we’ll take a look at some of the most important things you need to know about student loans in order to make the best decision for yourself.
5 Must now Things About Student Loans
You have options for repayment.
There are several repayment plans available for federal student loans, including the Standard Repayment Plan, the Graduated Repayment Plan, and the Extended Repayment Plan. You may also be eligible for income-driven repayment plans, which base your monthly payment on your income and family size.
You can potentially have your loans forgiven.
If you work in certain public service jobs, you may be eligible for loan forgiveness through programs such as the Public Service Loan Forgiveness (PSLF) program. You may also be eligible for loan forgiveness if you become permanently disabled or if your school closes while you are enrolled.
You should consider consolidation.
Consolidating your student loans can simplify the repayment process by combining multiple loans into one. This can make it easier to manage your payments and may also lower your monthly payment. However, consolidation may also extend the repayment period and result in paying more in interest over the life of the loan.
You may be able to discharge your loans in bankruptcy.
Discharging student loans in bankruptcy is difficult but not impossible. In order to discharge student loans in bankruptcy, you must prove that repaying the loans would cause undue hardship. This requires showing that you cannot maintain a minimal standard of living while repaying the loans and that this situation is likely to continue for a significant portion of the repayment period.
You have rights as a borrower.
The Higher Education Act and other federal laws provide certain rights and protections to student loan borrowers. For example, you have the right to a repayment plan that fits your budget, the right to postpone your payments if you have a hardship, and the right to dispute errors on your credit report. You should familiarize yourself with these rights and protections and take advantage of them if needed.
Repayment schedule for student loans
Student loans are not always easy to repay. The repayment schedule can vary, depending on your loan type and the amount you borrowed. But no matter how much you have to pay back, it’s important to start repayment as soon as possible. Here are some tips for repaying student loans:
-Make a plan. Figure out what you need to do each month to repay your loan. This might include setting aside money each week or paycheck, making regular payments, or using an online repayment calculator.
-Compare repayment options. There are many different types of student loans available, so it can be hard to know which one is best for you. Compare interest rates and terms before choosing a loan.
-Contact your loan servicer if you have questions or problems with your repayment plan. Your servicer is responsible for keeping track of your debt and helping you stay on track with your payments.
Defaulting on student loans
Defaulting on student loans can have serious consequences. If you default, your student loan lenders may take various steps to collections and foreclosure, including filing legal proceedings in court. Defaulting on your loans also can result in a loss of eligibility for future federal student loans and grants, and lower credit ratings that could make it harder to borrow in the future.
If you are having financial difficulties because of student debt, there are several things you can do to try to get out of default and avoid significant consequences. First, try to negotiate with your lender. Many borrowers find that they can reduce their payments or even eliminate them altogether by talking to their lender face-to-face or through online negotiations. If those negotiations fail, you may need to consider bankruptcy as an option.
Another option is loan rehabilitation. Loan rehabilitation is a process through which borrowers who are in default can have their loans converted into a more affordable repayment plan. Rehabilitation usually requires the borrower to make substantial progress toward repaying their debts under the new plan and often includes extensive counseling services from qualified counselors. There is no guarantee that Rehabilitation will work for everyone, but it may be worth considering if all other efforts fail to get you out of default and onto a more sustainable repayment plan.