Repaying Student Loans: Start Here

Ron Lieber opened his recent New York Times column with some strong words:

Too many people, including plenty of brand-new college graduates, fall far behind on their student loan payments for no good reason.
(
A Beginner’s Guide to Repaying Student Loans, NYT, 5/15/2014)

Ron Lieber is the “Your Money” columnist for The New York Times. In spite of what you may infer from that opening statement, Mr. Lieber’s column is really a positive set of guidelines and references to help those with school loans keep current with their loan payment responsibilities and protect their credit rating.

The Tri-Town Apple strongly encourages anyone with schools loans to repay, or the family of those with loans, to read Mr. Lieber’s article. Some excerpts from the article:

WHAT YOU OWE

…So repayment needs to begin with an accounting of every individual loan. Start with whatever is in your files. Then check to see whether you’re aware of all of your federal student loans. Borrowers can use the National Student Loan Data System website to get the details…

WHEN AND TO WHOM

…The first payments on your loans may be due at different times. Some federal loans give you a six-month grace period after you graduate while others give you nine months. With private loans, it varies.

Assume here (and really, everywhere throughout this process) that servicers will fail to find you and give you clear repayment instructions before the first payment is due. If you’ve moved or changed your email address since you took out your first loan and haven’t told the servicers about it, be especially vigilant…

TAKING LONGER

…The normal repayment period for federal student loans is 10 years. But depending on the loan and the balance, you may be able to lower your monthly payments by taking as long as 30 years to pay them off…

…The big downside to taking more than a decade to pay is that the total interest costs can be much higher. The Student Loan Borrower Assistance Project of the National Consumer Law Center has an extensive guide to loan consolidation on its website that outlines these and other trade-offs…

INCOME-DRIVEN REPAYMENT

…For people without much income, there are several government programs that set payments on federal student loans based on how much money you make…

…The income-driven payments may cause you to spend more on interest over time than you might have otherwise…

Mr. Lieber’s article extends these points and includes many references, with links, that provide information and references to help.  The Tri-Town Apple encourages you to read Mr. Lieber’s article.

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