Student loan debt is a serious issue, but student loans help many students go to school. As you consider money management services in your college years, you might have a lot of questions about how finances work in this regard.
These are the things every student should learn about student loans and repayment options.
What Kinds of Loans Can You Get?
As a college student, you can receive several types of student loans, including Direct Stafford loans (subsidized and unsubsidized) and PLUS loans (for parents). It is important to understand the different loan types when you apply for or accept the funding.
FAFSA, or the Free Application for Federal Student Aid, is the application you fill out to obtain these loans. The FAFSA determines your eligibility for these loan programs, and you need to fill it out annually to secure funding for your education.
If you are unsure what kinds of loans are right for you, you should speak with a money management professional to understand the details.
What Are Your Repayment Options for Student Loans?
There are several repayment options for student loans. You can discuss the many options with money management professionals to determine your eligibility and planning steps.
The standard repayment plan requires fixed payments that encompass 10 years. You can get a similar deal with the extended repayment plan, which gives you a fixed rate each month over 25 years.
Then, there are other cases. Income-based repayment plans are capped based on your current income level. Then, graduated plans allow you to begin with smaller payments and then work up to standard payments.
Can Your Student Loans Be Forgiven?
Each program is different, but in some cases, you may be able to forgive some student loans. If this is of interest to you, you should ask about a qualifying repayment plan available to you.
What Happens If You Can't Pay Your Student Loans?
If you are unable to pay your student loans, you may ask for a forbearance or a deferment, often for up to one year. This can help you take care of yourself as you look for a job after you graduate.
Keep in mind that student loans generally cannot be canceled in bankruptcy. If you are considering bankruptcy and have student loans, a money management professional can help you determine what steps you can take to relieve the financial burden of student loan debt. The same applies if you are considering taking on student loan debt for the first time.Share