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Get Ready to Conquer Your Student Loans


More than two-thirds of students who go to college borrow money to pay for it. The average graduating senior has over $23,000 in student loan debt. As we enter the summer months, students are preparing for work, job-hunting, or getting ready for additional school or time off. But it is also time to start thinking about and planning to repay those loans.

The rules governing Federal and private student loans, from application to repayment, vary depending on the type of loan. As you plan for repayment, make sure you understand the different types of loans you have and what the rules are.

Repaying federal student loans
For most federal student loans, there is a six-month grace period after leaving school. After this point, you will need to start making payments. Most American college students would need to start making payments between October and December of their graduation year. The standard federal loan repayment plan will have your loans all paid off in 10 years.

If you’re interested in the current balance of your Federal loans, check out the National Student Loan Data System. This system will tell you the amount you owe, as well as your servicer (the company that is responsible for collecting payments from you). You can then go to your servicer’s website, register to view your account online, and choose options like automatic debit or other payment options.

Repaying private student loans
Private student loans do not have a standard repayment process. Some you may have started paying off while in school; some may have a grace period condition similar to Federal loans. You should contact your lender or servicer for more information about when to start repayment and what the payment schedule is.

Whether private or public, staying on top of loan repayment is a shared responsibility between the borrower and the lender. If you are a borrower, it is in your best interest to make sure you understand the repayment schedule, and to make sure the servicer knows how to reach you. The best way to make sure you pay on time is to make sure you receive the bill on time, so tell the lender if you relocate. Unpaid balances continue to accrue interest, and late payments can result in penalties.

One more very important note for new grads: Generally speaking, both Federal and private student loans cannot be forgiven through the personal bankruptcy process. You will owe payments until your loans are repaid, so planning ahead for repayment is essential.

Keep checking the blog. We’ll be publishing some additional information on loan repayment, including opportunities to change your repayment plan to better suit your financial situation.

  • In-debt grad

    Helpful — You guys need to fix the student loan situation before it turns into another mortgage fiasco.

  • The SEO Expert

    Your student loan policies seem a lot more flexible than ours here in the UK.

    It’s great that students get a 6 month grace period on the loans. Maybe the UK will take note!

  • Richard Robert Wolfe

    Huh? I mean, they actually PAY you to write this? Talk about vapid? Astonishing that you dare to call this “advice” especially when your brand-new agency is already taking heavy fire from the Republican smear machine. You’re not doing yourselves any favors; you’re not even being careful. For example, what’s a federal loan and what’s a private loan? (Is a Stafford that’s serviced by, for example, Nelnet federal or private?) Dr. Warren saw fit to hire you; you had better find a way to create something authentic and of real use to students soon, or the Wall Street – Tea Party axis will put you out of business.

  • Anonymous

    Posts are so informative where we get lots
    of information on any topic. Nice job keep it up. We can see your hard work as
    well as skill. Damp Away

  • Insurance Quotes

    Most students don’t have debt because their parents pay for it

  • Raheeno

    Thanks.  You guys should work on student loans, the whole system is messed up and confusing!

  • John

    Are you serious?  Stop wasting my money with your useless advice.  People can read contracts.  We are not children.  Get a real job.  Elizabeth Warren is not fit to serve.

  • Mjc1999

    Can a private loan garnish your pay check in any amount they choose to?

  • web hosting NZ domains

    The students here in New Zealand have access to student loans provided by a an old socialist Labour Government. Now the collective borrowings in in excess of a billion dollars. Some student take off over seas thinking that they’ll not pay it back, most will go so they can earn better to pay it back.

  • M-Writer

    I completely agree that the student loan process is something that needs reform. It is difficult for students who have not been properly educated about money to have so much debt at the start of their adult lives. It’s a huge burden that has made some of my friends not pursue what they truly wanted to in life. I completely disagree with the person who stated that “most students don’t have debt because their parents paid for it.” Maybe the rich kids, but the majority of mid and lower class kids take that debt burden into their futures – and it’s very difficult. As far as being able to “read contracts” – unless you’re a law student who revels in legal-speak, no the contracts are no readable, nor does anyone want to read them.  

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