Managing Your Student Loans

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1. How do I know who my student loan lender is?

Before you graduate, your school will provide you with a list of the loans you have taken out while enrolled. If you’d like to get a jump start, go to www.nslds.ed.gov. This federal website will give you access to information on federal loans you have borrowed; private student loans will not show up on this site.

2. What happens to my student loans if I die?

Your federal student loans will be discharged in the case of death. The same may not be true for your private student loans. In some cases, private student loans would be the responsibility of a spouse or co-signer in the event of death.

3. What should I do if I lose my job and can’t afford to make my student loan payment?

If you can’t afford your monthly payment, you will need to contact your student loan lender. There are almost always options to temporarily reduce or halt payments, and they will let you know what options are available to you. The two forms of postponing your payments they will discuss are deferment and forbearance. Make sure you first check if you qualify for a deferment before forbearance, as it is the least expensive way to postpone payment.

4. What is considered a manageable monthly payment?

An affordable student loan payment is 10% or less of your gross (pre-tax) monthly income. If your payment is more than that, you will either need to cut back on other expenses to afford the payment or look into options to reduce your monthly payments.

5. If my monthly payment is really high, is there anything I can do to lower it?

In most cases, you will have options to lower your monthly payment amount. Short-term solutions include graduated repayment plans, which allow you to lower your monthly payment as low as interest-only for the early years you are paying back your loans. A repayment plan called “income-based” is also available, which allows you to have a monthly payment based on how much money you make rather than how much you have in student loans. You may also have the ability to extend your repayment term to longer period of time in order to lower how much you owe per month on your student loans. Contact your student loan company for more details.

6. Can I lower my monthly payment for the short term?

If you know that it will take you at least a few years before you can afford a standard monthly payment, you should consider a graduated plan or an “income-based” plan to so that your payments are affordable in the early years out of school.

7. Can I make payments for more than what is required?

There are no penalties for making extra payments on your federal student loans. You can make payments when no payment is due, and you can make higher payments than are due without any negative impact on your loans. If you have private loans, check with your lender to see if the same is true with them.

8. Should I consolidate my student loans?

A few years ago, a lot of students consolidated their loans at graduation because of financial benefits. Today, consolidation isn’t necessarily the answer because the financial advantages of a few years ago are no longer present. Most people who consolidate now do so for simplicity. However, if you hope to take advantage of the public service loan forgiveness program, you will need to consolidate your loans with Direct Loans.

9. Can I consolidate my loans with my spouse or parents?

You cannot consolidate your student loans together with anyone else’s loans. If one of your parents took out a loan for you, it will have to be paid back separately from the student loans you took out yourself.

10. Can I consolidate my private student loans?

There are lenders who will consolidate private student loans, but such loans often provide very little benefit to students. If you are considering a private loan consolidation, make sure your federal student loans are not included in the consolidation. By including them, you will lose the benefits available exclusively for federal loans.

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