Time flies. It may seem crazy to say it, but graduation is almost here. Graduating brings a new job, a new home and a new life. Also, with graduation comes student loans repayment. Often times, student loans get placed on the back-burner due to lack of preparation before graduation. How you manage your student loan payments will shape your finances for decades to come, so it is important to place student loans at the top of your pre-graduation to-do list.
Before walking across the stage, it is important to ask yourself these questions. If you need clarification regarding your answers, request an appointment with Powercat Financial. We are here to help!
- What kind of loans do I have?
If you have accepted loans to help fund your education, they are either private or federal student loans. You can look up your federal loans by going to www.studentaid.ed.gov. Once logged in, you will see the history of your student loans. It will show your current balance as well as the accrued interest that has grown on your unsubsidized loans. Remember, there are two types of federal loans – subsidized and unsubsidized. It is important to know the difference. With subsidized loans, the government subsidizes, or pays the accrued interest while you are in school. With unsubsidized loans, on the other hand, interest begins accruing as soon as the funds hit your account and it is your responsibility to pay back.
Private loans are a bit trickier to find. If you know you have received private loans but have forgotten who they were from, pulling a credit report is the best way to find out. You can do this by going to www.annualcreditreport.com. You are allowed to pull three credit reports per year for free; one from each of the three credit bureaus.
- Whom do I owe?
Each student who has accepted federal student loans has what is called a loan servicer. A loan servicer is the company that will collect interest and principal payments from you. You can find who your loan servicer is by clicking on each individual loans found on your www.studentaid.ed.gov account. It is encouraged to create an account on your loan servicer’s website before graduating. This is where you will make payments towards your student loans. Remember, you can make payments towards your student loans while in school and it will not have an effect on your in-school deferment.
- What are my repayment options?
This depends on what type of loans you have. Private student loans often follow a typical installment loan repayment structure, in which you make monthly payments for a fixed loan term. Federal student loans offer more options. By default, you will be placed on the standard repayment plan which consists of 120 equal monthly payments. There are other options that can change the structure of your repayment plan. Some extend the payments over a longer time period, others will start you off with a lower payment and work you up to a larger payment over the course of the plan. There are also options to reduce payments based on your income, but which you must qualify for. You can learn more about the available student loan repayment options here.
- When is my first payment due?
Federal student loans generally have a grace period of six months, meaning your first payment comes due six months after you graduate. This allows graduates to get settled in to their new life after college. It is important to know when your first due date is. You can find this by contacting your loan servicer. If you have private student loans, your payments might become due right away so contact your lender to find out.
- How can I budget in my student loan payment?
First, it is important to understand what your estimated monthly payment will be. You can find this here by logging into your www.studentaid.ed.gov account. After finding your monthly payment, begin creating a monthly budget that includes all of your income and expenses. To help you get started, please download Powercat Financial’s Excel budgeting tool or come in to meet with a peer counselor. Living on a budget requires continuous monitoring and adjustments but can help you reach your goals!
Student loans can be overwhelming and somewhat complicated. If you are stressed about adding an extra item to your to-do list, please request a FREE appointment with Powercat Financial today via www.ksu.edu/powercatfinancial/services. We can help provide clarity and direction for life after graduation.
One option available to all K-Stater’s is access to the Salt Money financial tool. Sign up today at www.saltmoney.org/kstate for your lifetime access of tips and tricks regarding your finances. They offer a chat service with student loan professionals to answer all of your questions after graduation. This is a great resource to take advantage of.
Peer Counselor III