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Throughout the college admissions process, you’ll encounter several important checkpoints. Selecting schools, applying for admission, and receiving college acceptances are all critical. But, your decision often comes down to how you will pay for it. Financial aid can help by providing scholarships, grants, work-study employment opportunities, and student loans to those who qualify. Below are essential financial aid facts every student should know, including an introduction to the FAFSA.

  1. Most financial aid requires filling out the Free Application for Federal Student Aid (FAFSA)
    The FAFSA is the application for federal grants, work-study, and federal loans. Colleges and most state grant programs use the FAFSA to award their financial aid. Check your school’s financial aid website to see if you need to submit additional forms. When filling out your FAFSA, note that many state grant applications require you to list an in-state school first for consideration. You can find additional resources on filing the FAFSA on our website, with articles like Need Help Paying for College? We Have Tips for Filing the FAFSA.
  2. Know and meet financial aid application deadlines
    Most schools have deadlines for submitting the FAFSA. Complete yours in time to meet the earliest deadline for the schools you’re considering, or for your state grant program if that deadline is first. If you miss deadlines, you may receive fewer grants, need more student loans, or may be offered less financial aid overall. You can find deadline information on college financial aid websites or visit the FAFSA site at studentaid.gov. Tip: Using the Internal Revenue Service Data Retrieval Tool (IRS DRT), which automatically transfers tax information into the FAFSA form, can save you time searching for tax records and eliminate errors.
  3. Amend your information if your financial situation changes.
    The amount and type of financial aid you qualify for is based on the income information submitted on your FAFSA. If your family’s economic situation changes in such a way that your financial need increases substantially, your financial aid office needs to know. You should file an amended FAFSA and/or talk with someone in your financial aid office about the changes to see how they impact grants, scholarships, work-study, and student loans you may receive.
  4. Don’t rule out a college because you think it’s too expensive
    The intent of financial aid is to provide access and college choice for students with financial need. If you are accepted at a school and filed your FAFSA, along with other required forms timely, you will receive a financial aid award notification before you are asked to make a decision about whether you will attend. To be in the best position, apply for admission at a few schools and send your FAFSA to all.
  5. Remember to compare financial aid packages.
    If you’ve followed the steps above, you should receive financial aid packages from a few schools, if you are eligible. You can compare the amount of scholarships, grants, work-study, and loans offered at each school, and calculate your net costs at each. When determining your school costs, consider all expenses – tuition, fees, room, board, books, supplies, transportation, and personal expenses. The makeup of your financial aid package differs among schools, and the net cost may differ as well. If you need additional aid, there may be other federal and private student loans to help cover your portion of costs.

Before you accept your financial aid and make a final decision about the school you will attend, be sure to read all the information accompanying your financial aid offer. You should fully understand each program in your package, your obligations, and the renewal process for each program. If you have questions, your college financial aid office is an excellent resource.

U-fi From Nelnet is here to help support the awesome work you’re doing in the classroom with helpful tips and resources on financial aid, loans, and taking control of your financial future. We also have competitive rates on private student loans to help you achieve your educational goals.

The majority of college students now graduate with student loan debt. But, keeping your borrowing to a minimum and setting a budget makes repayment easier when it comes time for repayment. Learn more about understanding your expenses and financial resources each semester to effectively determine your budget needs.

Understanding Education Costs

First, you need to understand what your direct education costs are going to be each semester. These are costs by your school that include tuition, fees, books, supplies, and room and board. Students living off campus also need to identify extra monthly expenses, such as rent, utilities, groceries, transportation, etc.

Sources of Income

Once you’ve identified your expenses, take note of what resources you have to pay those costs.

Financial Aid

To find out if you’re eligible for federal and some state financial aid programs, you need to fill out the Free Application for Federal Student Aid (FAFSA). Remember—you need to complete the FAFSA every year starting in October for the following school year.

If you receive financial aid, the school applies the funds to your direct school costs, such as tuition and fees. If there are any financial aid funds left over, you receive that amount to use for other expenses. These funds are intended to cover the costs you incur during that entire semester—so don’t rush out and spend it all at once!

Additional Income

Check in on any other sources of income available to you. If you work while going to school, use that income as a resource for expenses. Perhaps you also have financial support from parents or other family members. Once you’ve identified all sources of income, you may realize that your expenses are greater than the income or resources you have to pay those expenses. At this point, it’s a good idea to see if there are ways to cut your expenses.

Student Loans

For some students, student loans help pay some of the expenses not covered by other income sources. Successfully identifying your expenses and available resources gives you a good idea of what you need to borrow. If you do need to take out a student loan, only borrow what you need and nothing more.

Student loans can be a great resource when used responsibly. Remember to use your federal student loans first before exploring private loan options.

College is difficult enough when you’re trying to get through classes and exams. Put yourself in a better position to focus on your studies by setting a budget so you don’t need to worry about your finances. Remember to continually revisit your budget and develop a solid plan for understanding your expenses each semester.

For undergraduates and graduates considering student loans to help pay for their education, finding a low interest rate loan is important. Understanding how rates are set and how they potentially change over time can help you decide which loan is best for you. Let’s take a closer look at what determines the interest rate on various types of loans.

Direct Loans

The largest student loan program in the United States is the Direct Loan Program and is offered directly through the federal government. The formulas for setting interest rates for the Direct Loan Program are determined by Congress. Currently, the interest rate is set as a fixed rate for all loans first disbursed on or after July 1 and by June 30 of the following year. So, any loan first disbursed during that one-year window will have the same interest rate for the life of that loan.

The interest rate is the index plus an add-on or margin. In the case of federal loans, the financial index used is the 10-year Treasury note auctioned at the final auction held prior to June 1. That index is then used for new loans first disbursed in that following July 1 – June 30 timeframe.

The following chart represents the interest rate calculations for federal Direct Loans first disbursed on or after July 1, 2020 and before July 1, 2021.

Borrower Type Index (10-Year Treasury Note) Add-On (margin) Fixed Interest Rate
Direct Subsidized Loans Undergraduate Students 0.700% 2.05% 2.75%
Direct Unsubsidized Loans Undergraduate Students 0.700% 2.05% 2.75%
Direct Unsubsidized Loans Graduate/Professional Students 0.700% 3.60% 4.30%
Direct PLUS Graduate/Professional Students and Parents of Dependent Undergraduate Students 0.700% 4.60% 5.30%

Private Loans

For private student loans, the interest rates will still be based off of a financial index (although the exact index may vary by lender) plus a margin. However, other factors will also go into determining the interest rate on private student loans. The borrower’s credit score (or cosigner’s credit score) is a determining factor in the interest rate assigned to a private student loan. A high credit score may translate to a low interest rate. Another factor that can determine the interest rate on a private student loan is the length of the repayment term. Typically, a longer repayment term means paying a higher interest rate.

Fixed Interest Rates

Private student loan lenders will usually set their fixed interest rates prior to July 1 for the upcoming school year. That fixed rate will remain constant for the life of the loan. Lenders may adjust their fixed interest rates each year for new loans or even during the year if there is a dramatic change in market conditions.

However, once you’ve received your loan, your fixed interest rate for that specific loan will remain the same until the loan is paid in full. Your monthly payment will also remain constant for the duration of your repayment term.

Variable Interest Rates

When private student loan lenders set their variable interest rates, they may use a different financial index. Some lenders will use the 1-month LIBOR (London Interbank Offered Rate) where the variable interest rate will fluctuate monthly based on changes (up or down) in the 1-month LIBOR. Other lenders may use the 3-month LIBOR and adjust their variable interest rates quarterly (every three months).

Finally, other lenders may use the Prime Rate as their index and adjust their variable rates monthly. The bottom line is that your variable interest rate will likely change each month or quarter and your monthly payment will also go up or down based on your rate increasing or decreasing.

So, is any particular type of index better than another when evaluating interest rates from different lenders? You really need to know what the index rate is as well as the margin being added. For example, if you see an offer for an interest rate of “Prime + 1.5%” that might sound pretty good compared to an interest rate of “1-month LIBOR + 4.50%.”

Visually, it just looks like the first rate would be lower. However, if the Prime Rate is 4% and the 1-month LIBOR rate is 1%, both rates would equal 5.50%. It’s always a good idea to look for a lender’s Application and Solicitation Disclosure to see the true interest rate calculations.

Congratulations! You’re graduating soon and will be searching for your first job out of college. It’s an exciting time in your life. However, if you’re like the majority of college students, you’re also graduating with student loan debt. Now is a good time to make sure you’ve got a plan to manage your student loans after you graduate.

Here are some easy steps you can take to set yourself up to successfully manage your student loans.

First, Identify All of Your Student Loans

The best place to start is at the National Student Loan Data System (NSLDS). You can find information here about all of your federal loans. This will give you all the details you need to understand how much you’ve borrowed on your federal loans. You can also find out who to contact for questions about your federal student loans.

If you used private loans from a bank or other financial entity, check with your lender to make sure you have the correct loan information.

Next, Get an Idea of What Your Monthly Payments Will Look Like

At StudentLoans.gov you can access a repayment estimator for your federal loans that will give you an idea of what your monthly payment would look like under the different repayment plans available. Depending on your individual circumstances, it’s likely there is a plan that will work for you. If you have relatively low debt and a good salary, you may want to pay off your loans ASAP. The standard 10-year repayment term allows you the quickest and lowest cost method to pay off your loans.

If you have a higher debt load or lower income, there are options that base your student loan payment on your income. Income-driven repayment plans are often helpful since they give you a more affordable monthly payment based on your income. You can learn more about these options as well as how to apply them to your student loans at StudentLoans.gov.

For private loans, visit your lender’s website to access repayment calculators. Or, simply contact your private loan provider for additional information on what monthly repayment amount you can expect.

Know When Your First Payment is Due

With federal loans, you have the ability to postpone payments while you’re enrolled in school at least a half-time. This is also true of some private loans. That means you’ve probably not made any payments on your loans, or perhaps you’ve made some small payments to offset accruing interest. You are also given a grace period on your loans. The grace period is typically six months from your last day of school. The last day is usually considered when you graduate or have dropped below half-time enrollment. At the end of that grace period is when your first payment will be due. Make sure you know when that due date is. That will give you plenty of time to prepare and budget for that new payment.

Know Your Options if you Have Difficulty Making Payments and Need Assistance

There are a number of options for borrowers who encounter situations that make it difficult to manage their student loans. Your student loan servicer will work with you to find a solution, but you have to contact your servicer to get assistance. For example, if your income has changed dramatically you might want to change to an income driven repayment plan or adjust the plan you’re on based on your change in income. Additionally, if you return to school, to pursue a graduate degree for example, you can postpone (or defer) your student loans while you’re back in school. Don’t make the mistake of simply ignoring your student loan payments and damaging your credit score.

As you look forward to graduation and starting a new chapter in your life, just remember to do a little planning and research how to best manage your student loans and find the best repayment plan for your situation. And remember, your student loan servicer is there to help you if you have any questions.

The holidays are over and the new year brings a new semester. For many students, that means a new round of bills and education expenses. That means it’s a perfect time to evaluate your finances and make sure your budget is in the right place.

If you attended college in the fall, you may have relied on financial aid to help cover your education expenses. With a new semester about to begin, you may want to reconsider your options. Many students still owe a balance from fall semester. Meanwhile, others just realized they may need additional funding to help pay for the upcoming semester. Use this time to take stock of your financial resources and make a plan to ensure everything is covered.

Do you still owe a balance on outstanding charges from your fall semester?

You may be required to fully satisfy outstanding charges before you can complete your enrollment for the next semester. Make sure you take care of the previous balance as soon as possible. That way, you avoid any potential delays with your upcoming enrollment. If you didn’t have enough financial aid or personal resources to pay your prior semester’s bills in full, consider a private loan to help cover what you still owe.

Did you apply for financial aid either before or during the previous semester?

It’s always a good idea to apply for financial aid by completing the Free Application for Federal Student Aid, or FAFSA, even if you don’t think you’ll qualify. Not everyone qualifies for grants or other “free” money. But, you may qualify for federal student loans, like unsubsidized loans, which are not based on financial need. You can still complete the FAFSA, even after the school year has started. It’s free and doesn’t take much time, so it’s worthwhile to submit. That way, you’ll know you’re not missing out on any financial aid programs.

What are your education expenses going to be in the upcoming semester?

By January, you should have an idea of your direct college expenses are for the upcoming semester. These education expenses including tuition, books, housing, and other costs. Do you have financial aid that pays for everything, or do you still have a gap where additional money is needed? Make sure you look at your full semester and anticipate all of your expenses. Set a budget so you’ll know exactly what your expenses are. Make sure to keep track of what types of income or financial resources can cover those expenses. Use all the financial aid resources available to you, including federal loans, to help pay your costs of attending college. If you still find yourself in need of additional money, you can explore the possibility of a private student loan and find a solution to help cover your college expenses.

When should you apply for next school year’s financial aid?

In case you missed it, you can now complete the FAFSA starting on October 1 for the following school year. You may only be halfway through the 2018-2019 school year, but it’s already time to submit your FAFSA for the 2019-2020 year. If you haven’t completed the FAFSA for next year, it’s important to get that taken care of as soon as possible. With the earlier submission date for the FAFSA, it’s critical to get your application in as quickly as possible so you don’t miss any priority deadlines for state grant aid or other types of aid that may not be available if you apply too late.

Remember, now is the time to make sure you have everything in order for the current semester and for the next school year.

Winter break is often a favorite time of year for college students. It’s a chance to go home, visit family and friends, enjoy home-cooked meals, and maybe do a little holiday shopping. Unfortunately, working off that extra helping of pumpkin pie may be easier than off your holiday spending.

5 Holiday Spending Tips

As you prepare to enjoy the holidays, these tips can help you avoid spending traps. Here’s how you can ring in the New Year without a mountain of debt and  holiday spending regret.

  1. Don’t use student loans to pay for a holiday trip or gifts.

    Using a student loan to finance a trip over the holiday break or a shopping spree might be tempting. But remember, your student loan is intended for educational expenses. Plus, you really don’t want to take on student loan debt for a short term benefit that you’ll be paying back for 10-plus years with interest.

  2. Avoid paying for everything with a credit card.

    Much like using a student loan, you’re better off to simply pay with cash and avoid using a credit card for holiday expenses. Credit cards will typically have high interest rates, especially if you carry a balance. If you can’t pay cash for your holiday purchases, it’s probably not worth the cost.

  3. Don’t feel obligated to buy gifts for all your friends and family.

    If you’re a student, your friends and family understand that you’re on a tight budget and may not have the resources to buy gifts for everyone. Simply spending some time with friends and family will likely be more meaningful than any gift you could purchase at the mall. Find ways to do small but meaningful things that will be appreciated.

  4. Don’t forget to set a budget or spending limit.

    It’s important to know in advance what you can reasonably afford to spend. It’s a good idea to set a budget for yourself and cap your spending at a certain dollar amount. That will help keep you on track and also let you plan better for the people on your gift list, and possibly help you cut back on the number of people on your list. Some families draw names for gifts or find other creative ways to help family members keep their expenses down and enjoy their time together.

  5. Avoid paying for gift wrapping or expensive gift bags and cards.

    It’s convenient to drop your gifts off and have someone else wrap them. However, there’s a cost for convenience and it simply might not be worth paying for. Buying wrapping paper after the holidays is a great way to save money and plan ahead for the next year. Plus, if you plan and don’t make all your gift purchases at once, you won’t be bogged down wrapping a lot of gifts at the last minute. Often, a card and a gift bag may actually cost more than the gift you’re giving.

With a little discipline and planning, you can set yourself up for a fun-filled holiday season without incurring the stress of spending too much or putting yourself into debt. Remember to enjoy the holidays and the time spent with friends and family. Many times, the best gifts are the ones that don’t cost anything at all.

At some point, most of us say, I wish I knew then what I know now. That same sentiment holds true for some college students regarding the financial aid process. After learning about the financial aid process, some students look back and wish they made different decisions.  Being better informed from the start changes how students approach their financial aid and funding options.

Here are five things students wish they knew about the financial aid process while planning for college.

1. It’s Never Too Early to Start Planning and Saving for College

College-bound students and their families often wait to think about the admissions process and financial aid options. Many times, they wait until the student’s junior or senior year of high school. However, students should research schools and possible career options early. Getting started in high school or junior high gives them an idea of which schools are the best fit. Heather, a junior in college, said she drastically underestimated all the costs associated with her education. She didn’t know she needed to rely on student loans as much as she did. Even if you expect a scholarship, keep in mind the total costs you and your family may incur. These costs can have an impact on your long-term planning and financing.

2. Know Your Deadlines and Don’t Miss Them

Braxton is in his freshman year and says he missed out on some state grant money because he waited too long to complete his FAFSA (Free Application for Federal Student Aid). He said if he’d been more aware of his state deadline, he would have applied sooner and likely received money from his state grant program. He also said there were some scholarships that had very early deadlines that he missed. It takes some organization and research to be sure you know all the relevant deadlines for various scholarship and grant programs.

3. You Don’t Have to Figure It All Out on Your Own

The financial aid process can often be confusing to first-time students. Rather than trying to do it all on your own, you can find help. Your high school counselors are great resources. If you have a college or university nearby, they may offer free FAFSA workshops or presentations. They can also help you understand the financial aid process better. If you speak with your high school counselor or someone from a financial aid office, don’t be afraid to ask questions so you’ll be certain you know what you need to do. Although you’ll be doing your first FAFSA as early as October of your senior year, it’s never too early to begin learning everything you need to know. Federal Student Aid at the U.S. Department of Education has a FAFSA4caster that you can use to understand your options for paying for college.

4. You Don’t Have to Accept the Full Loan Amount on Your Award Letter

Once your financial aid application is finalized, your financial aid office sends you an award letter. Your award letter may show different types of financial aid, such as scholarships, grants, and student loans. Colleges usually provide award packages to cover your entire cost of attendance (COA). Your COA includes tuition, books, supplies, housing, etc. However, only borrow what you need, even if you were offered a higher amount. You don’t need to accept the full amount awarded.

Another college student said she assumed she should take the amount offered. At first, she thought the extra money could be a cushion if needed. She admitted she spent frivolously on things she really didn’t need. She forgot her loan was unsubsidized. That means interest accrued on her loan while she was in school. Student loans are a great resource to help pay for school as long as you understand the terms and conditions and only borrow what you need.

5. Don’t Assume You Won’t Qualify for Financial Aid and Skip Completing the FAFSA

Some students and families believe that their income may be too high to qualify for any type of financial aid and simply do not complete the FAFSA. Although you may not qualify for grants, you still need to complete the FAFSA to determine your eligibility for student loans and college work study. Some programs (such as unsubsidized student loans) are not need-based and do not have an income limitation. Also, the FAFSA is free to complete, and you could qualify for some other types of aid. One thing families forget is that if they happen to have a higher income, they may also have multiple children attending college, which is a big factor in determining financial aid eligibility. Factors such as your family income, household size, and the number in your family attending college all help determine your financial aid eligibility.

By planning ahead and thinking about the cost of college early, many of these common scenarios can be avoided. By starting your planning early, you can avoid the “I wish I knew then what I know now” feeling down the road.

You’re in college and on your own, but you may still experience the occasional financial pitfall. Below are money mistakes many students make, and some tips on how to avoid them.

Financial Pitfall #1: Spending all your living expense money early in the semester.

You’ve probably set aside spending money for personal expenses if you live off campus. Or, you may have financial aid funds to use for room, board, or other educational expenses. That money needs to last through the entire semester, but many students spend it within the first few months. How can you avoid spending your money too early? Use a budgeting app like Mint to help you keep track of your available money and expenses.

Financial Pitfall #2: Not taking advantage of part-time employment opportunities.

Most schools offer part-time employment options for students through Federal Work-Study, and by posting on- and off-campus jobs. You might worry that a job will conflict with academic work, but studies show that students who work between 15 and 20 hours while in school are generally more confident and successful. Having a job helps bring in money regularly throughout the semester and can help build your resume. Your college financial aid office awards Federal Work-Study and generally posts related job opportunities. Work-Study is based on financial need and requires a Free Application for Federal Student Aid (FAFSA) . Other part-time jobs may be posted by the Career Office, Student Affairs, or other places on campus. Check your school website for more information.

Financial Pitfall #3: Accumulating credit card debt.

You’ve probably already received credit card offers in the mail. You may also notice giveaways and travel rewards that make the offers sound appealing. Be careful – as a new credit card holder, your interest rates will be high, and credit card offers tend to have many fees attached. Be sure to read the fine print and note that the initial low interest rate offered may expire in just a few months. You can quickly accumulate credit card balances that can swell out of control, especially if you’re only making minimum payments. Here’s an overview of credit card pros and cons, along with additional information about other matters to consider.

Financial Pitfall #4: Taking out student loans without understanding them.

Student loans are so common that students often see them as just another type of financial aid. There is an important difference; student loans must be paid back. While student loans can be a useful way to pay for your education, keep your borrowing to a minimum. Know what your monthly loan payment will be when you get out of school. Understand what you can realistically afford to borrow. It is also important to know the types of loans, the terms of those loans, and the options available. To get a general idea of what your monthly loan payment may be when you finish school, Federal Student Aid provides an easy-to-use repayment calculator.

The earlier you can learn the basics about managing your finances, the better off you’ll be in the long run. These simple steps should help you build the foundation you need for a successful financial future.

If you borrowed student loans to help pay for college, you may not be required to make any payments until after you graduate or drop below half-time enrollment. That sounds like a pretty good deal; no payments and no worries while you focus on your studies. But remember, if you take out a federal Direct Unsubsidized Loan, a federal Direct PLUS Loan, or a private loan, interest accumulates during those months (or years) you’re in school and not making any payments. Here are some ways you can save on your student loans while you’re still in school.

Accruing Interest

Interest that accrues on your student loan will typically be capitalized when you begin repayment. That means any accrued interest during those months you are not making payments is added to the original principal amount of your loan. For instance, if you borrowed a $15,000 student loan with an interest rate of 6% as a freshman and made no payments for the four years you were in school, plus your grace period, 51 months would have passed. In this scenario, when you begin your repayment period, you would actually have a balance of $18,825 when you start repaying your loan 51 months later. That’s because $3,825 in interest (also known as capitalized interest) would have accrued during those 51 months and was added to your original loan amount.

In-School Payments Can Help

Now, let’s say you have a part-time job while you’re in school, working 15-20 hours a week to help with some of your expenses. If you could simply pay around $75 a month toward that $15,000 student loan, you could actually pay all the accruing interest (remember, that’s $3,825 total that would have been added to your loan when your first scheduled monthly payment is due). If you’re able to pay $75 towards your student loan’s accruing interest, the total cost you could ultimately save over the life of a 10-year repayment period would be nearly $1,300.

Example

Paying Interest While In School (No Capitalized Interest) Fully Deferred Payments While In School – No Payments (Capitalized Interest)
Original Loan Amount $15,000 $15,000
Interest Accrued During In School and Grace Period (51 months) $3,825 $3,825
Interest Paid During In-School and Grace Period $3,825 $0
Loan Amount When Entering Repayment $15,000 $18,825
Number of Months of Repayment 120 120
Monthly Payment $166.53 $209
Total Interest Paid on Loan (including any payments during in school and grace period) $8,808.60 $10,080
Total Paid on Student Loan (original loan amount plus interest) $23,808.60 $25,080

As you can see from this example, making interest payments while you’re in school and during your grace period can help you save on your student loans down the road. Plus, making payments during your in-school and grace period also gets you in the habit of making payments on your student loan and better prepares you for successful repayment. Remember, this is just an example of borrowing one loan during your freshman year of college. Imagine what the capitalized interest could look like if you borrow each year of college, or what your savings would be by making continued interest payments while you’re in school. You can learn more ways to save on your student loans and get additional helpful information by visiting our student loan resources.

If you graduated from college this year, you may realize just how much student loan debt you have. With the average student loan debt at around $29,000 per student, it can be overwhelming to see that number and you may wonder how you are going to pay it back. Well, take a deep breath: you have several options when it comes to repayment. Don’t hesitate to give your student loan servicer a call because they will help you work through your options. Or, you can also follow these 4 steps to get ready for student loan repayment. It’s important to investigate your options and be prepared. It’s equally important to know a few things you should avoid.

Deferment & Forbearance

Deferment and forbearance allow you to temporarily postpone making payments or can reduce your payment for a period of time. Sounds great, right? So, what’s the problem? Your student loans continue to accrue interest. That interest could cost you thousands of dollars a year, depending on your student loan debt. Don’t delay the inevitable. You will have to pay back your student loans whether you pay them now or pay them later. Deferment and forbearance are great options if you have no financial means when you enter repayment. However, you shouldn’t use them as a way to delay paying your student loans. If you do need to go this route, try to at least make interest payments on your loans. If you don’t, the interest will capitalize leading to higher student loan debt and higher monthly payments once your deferment or forbearance expires.

Don’t Miss Payments

Make your payments every month and on time. If a loan payment is not made by the due date, the loan becomes delinquent until payment is received. Depending on your servicer or lender, this delinquency can affect your credit report as a negative mark, therefore negatively affecting your credit score. In addition, when you miss monthly payments, your payment will double, then triple, and continue to snowball which may put you in a situation that’s difficult to catch up on.

Avoid Scams

We’ve all heard the saying, “if it sounds too good to be true, it probably is.” It may seem enticing to pay a company to handle the stress of your student loans and promise you low payments or loan forgiveness, which are why these companies exist, but you’ll be wasting your money. Student loan servicers and lenders will not charge fees for finding a repayment plan that fits your needs. The U.S. Department of Education offers several student loan repayment plans and loan forgiveness, cancellation, or discharge for certain circumstances, but all of their services are free of charge.

Being prepared for repayment and understanding what you should avoid are two big steps to successfully paying off your student loans. Just remember, your student loan servicer is there to help you. If you need to adjust your repayment plan or just have questions about your student loans, give them a call (844.307.3451).