How to manage student loan debt (PRINT ONLY)

Headline: How to manage student loan debt

Thanks to student loans and other financing options, a college education has become much more attainable for a wider array of students. Student loans may make it possible for millions of students to attend college when they otherwise could not afford tuition, but such loans also can put borrowers in financial hot water if they’re not careful.

Just like any other form of credit, a student loan is usually easy to spend but not as easily repaid. Add to that the fact that most educational loans do not require payment until after graduation, it could seem to a student that he or she is attending classes with no strings attached. Some students also use loans to finance their living arrangements and pay for their books, making it easy for loans to add up quickly.

Another potential pitfall of borrowing to finance your education is the uncertainty many people have with regard to the terms of their loans. Many people sign on the dotted line of their lending agreements without ever reading the fine print, which may dictate repayment terms and interest rates.

But students need not succumb to student loan debt shortly after they don their caps and gowns. The following are a few ways to avoid financial struggles that stem from student loans.

Learn your loans. Learning the terms of your loan is the first step to avoiding delinquency or default. Take the time to fully understand the type of loan you are receiving as well as when repayment begins and how much your monthly payments will be. Loans may be backed by private lenders, but many student loans are issued through federal government programs. Each type of loan has its own set of regulations. It’s also important that you understand the details of loan forgiveness and what happens should you miss a payment.

Familiarize yourself with the loan repayment schedule. Every student loan comes with a grace period, or the time between when you graduate and when the first payment must be made. Grace periods typically range between six and nine months for federal loans, while privately issued loans may have a different grace period. If you have yet to secure steady employment when your first payment comes due, contact your lender to see if payments can be deferred a little longer.

Negotiate payment options. Some lenders simply follow a standard formula for determining a repayment schedule, which typically lasts 10 years. If that payment amount or schedule seems unattainable, consider speaking with the lender about changing your payments. Repaying the loan over a longer period of time will lower your monthly payments but result in you paying more interest over the life of the loan.

If you find you have extra money on hand, make larger payments toward the loan and ask that this money be applied to the principal. Paying down the principal can significantly reduce the loan and reduce the interest you’re paying as well.

Choose an employer wisely. According to The Project on Student Debt, some jobs offer loan forgiveness. After 10 years of qualifying payments for people in government, nonprofit, and other public service jobs, loans may be written off. There are additional federal loan forgiveness options available to teachers, nurses, AmeriCorps and PeaceCorps volunteers, and other professions, as well as some state, school, and private programs.

Don’t ignore problems. If you are falling behind on your loan payments, take action right away. Doing something is better than doing nothing at all. An inability to repay your student loan debt can cause problems later in life, so don’t allow the problem to snowball before you do anything about it.