The biggest fear many students hold about finishing college is the idea of having to pay back all of the loans it has taken to get to that point. It can be hard when you already have so many new things to budget on top of loan payments such as rent, food and other necessities on top of job hunting.
“I encourage students to use the budget tool within GradReady. GradReady is a tool on our website that students can use for free to manage budgets, learn how to maneuver through simple banking transactions, and learn about other types of debt such as mortgages, automotive loans, and more,” Director of Financial Aid, Amy M. Barnhart said.
The first step to avoid running into a budgeting crisis is by creating a budget that prioritizes needs over wants.
“The budgeting tool is amazing, students can also upload federal loan information so that loan payments can be factored into the budgeting tool as well. I also encourage students to look at loan repayment options such as graduated repayment or income sensitive repayment plans,” Barnhart said.
After graduation, students should speak with their student loan servicer about options in repayment such as consolidation, forbearance and deferment, according to Barnhart. She also shared students can find their servicer information by going to the National Student Loan Data Service (NSLDS) website.
“I also recommend that students only use the federal consolidation process, other lenders may add fees and have higher interest rates, which could ultimately make student loan payments higher or extend the repayment period. There are a lot of scams out there, so don’t trust the information you read,” Barnhart warned.
The best way to avoid these scams is to always use a reputable source to talk about debt and repayment of student loans, according to Barnhart. She recommends if you ever have questions, to reach out to RaiderConnect for guidance.
While it may feel like you need to start paying your loans off the minute you graduate, you do have a little bit of time.
“Federal Direct Stafford Loans have a six-month grace period, and Federal Perkins loans have a nine-month grace period. Students should begin repayment immediately after the grace period ends,” according to Barnhart.
Barnhart encourages students to make interest-only payments while enrolled in school. “Just paying the interest will reduce loan payments after you leave school. Students should contact their student loan servicer to make interest only payments, if they have enough available income to do so,” she said.