It’s no secret that most graduates are in debt. By the time you walk across the stage in cap in gown you have likely built up several thousands in student loans. According to the Project on Student Debt, students, on average, are $23,200 in the hole by the time they get their degree. So instead of cringing when you get your first letter from Sallie Mae, you should educate yourself. Here are some tips on how to manage your student debt:
1. Know what you owe: Go to the National Student Loan Data System at to find out how much you owe. The website will be able to keep you up to speed on all the loans you have taken out so far. You should also know the different federal student loans you have, the lenders on each of the loans and the interest rates one each of them.
2. Never default on a student loan: There’s never a good reason to default on a loan. No matter what your financial situation is, lenders have several repayment plans, including a 36-month economic hardship deferment plan. Keep in mind that once your loans become delinquent, you lose the right to deferment and have to deal with those pesky collection fees.
3. Automate your payments: If you’re forgetful like me, you’ve probably stressed about getting that envelope in the mail only days before the payment is due. Not to worry. With automated payments, your monthly student loan payment can be drafted monthly without you ever having to write a check or purchase a stamp. Most lenders’ websites have made it a cinch to sign up for automated payments. Keep in mind that automated plans are usually only available to borrowers who make their payments on time for the first 24 to 36 months. So you will want to get signed up right away.
4. Consider consolidating: Chances are, if you have graduated, you have got tons of letters piling up in your mail box asking you if you want to consolidate. Consolidation means that you will be taking all your student loans and combining them into one big loan under one lender. Consolidation is available for most federal loans and some private loans.
5. Stay informed: There are tons of student aid advocates that have got your back. They are constantly working to find ways to lighten the load of your student debt. So it’s imperative that you keep track of information that affects your loan borrowers. For instance, under the public service loan forgiveness program, borrowers who are in the military, law enforcement, public education and others who have public service careers could have some or all of their education debt canceled after 10 years.
Via The Washington Post and Young Money