These days, a diploma is not all graduates receive to remind them of their hard work and accomplishments. As they walk off the stage and into the real world, piles of student loans and debt serve as their unwelcome welcome mat.
As a recent NPR article states, student debt has begun to impact their lives more than just financially. Now, the amount of graduates’ debt may be a make-it-or-break-it factor in relationships and social lives.
So, how can graduates manage their debt instead of having their debt manage them?
Get organized. It’s a simple idea but is the best first step to staying on top of payments. American Student Assistance is a valuable and free resource, offering student loan organizational charts, budget templates, e-mail payment reminders and more.
Negotiate income-based payment options. Students who qualify for this option have debt that is high relative to their earnings. It caps their required monthly payments at an affordable amount based on their income and family size.
For more information about income-based payment options, visit Federal Student Aid. To determine eligibility, fill out the repayment calculator.
Consider deferments and forbearance. Deferments and forbearances are temporary halts to a loan and may prevent students from defaulting on payments. However, interest may still accrue on some loans during this time. Therefore, it is important to understand fully what the terms mean.
Seek advice from a loan servicer. A loan servicer is a company that collects loans and responds to customer service inquiries. Loans are automatically assigned to these companies. Students can access information about their specific loan servicer by visiting the National Student Loan Data System.
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