KUSA - As a college student, you have been looking forward to graduation day for years. Now it's time to begin paying back thousands of dollars in student loans.
Student loan debts take time to pay off, but getting started now may help prevent paying thousands of extra dollars in interest, or even worse, defaulting on your loan.
Mpowered, a Colorado-based nonprofit resource for individuals and families in Colorado, offers the following recommendations for graduates:
- Understand who you owe, how much you owe, and the status of your loans. Loan management and repayment options will depend on whether your loans are public (federal) or private (corporate). You can inventory public loans at nslds.ed.gov and private loans through your credit reports at annualcreditreport.com.
- Communicate with your lender or servicer. Neglecting your loans and failing to communicate with your lender or loan servicer may put you at risk of defaulting on your loans. Ask your lender or servicer about opportunities, services or programs that might help you avoid serious financial consequences.
- Understand your repayment options. Federal loans have several income based repayment options. Learn which you qualify for, how to participate and the potential outcomes of each option.
- Learn about student loan forgiveness programs. There are a few types of loan forgiveness, cancellations and discharges. Visit www.studentaid.ed.gov/repay-loans/forgiveness-cancellation to learn more and see if you qualify.
- Avoid private student loans. Private loans are governed by the promissory note you sign when taking out the loan. These loans offer fewer choices for borrowers in repayment or undergoing a crisis. There are usually better options for financing your education, including grants, fellowships, work study, choosing a more affordable school, and so on.
- Research alternative financing options. While research still indicates that college graduates retain a financial and employability advantage over high school seniors, studies increasingly show that student loan debt has adverse effects on upward mobility and financial growth. Minimize your use of student loans!
Student loan debt can be overwhelming, but it doesn't have to be overpowering. You can take control of your debt and you can pay back your loans.
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