Student Loan Repayment: The Basics

   

Student Loan Replacement The Basics

Everybody take a deep breath and bear with me because we're going to start a new series on STUDENT LOANS.  I know those are two of the most hated words that someone can utter, but the truth is that they are all too often neglected and forgotten.  Personally, I understand that there is a lot going on and that the thought of tackling them can be OVERWHELMING, but it's going to be OK because I'm going to teach you how to navigate all those terms and really help yourself make that debt a little easier to handle.

In this post we're going to focus on the basics of Student Loan Repayment.  The first thing you need to determine is what KIND of loan you have and WHO your servicer is.  This is honestly one of the MOST important things you can do for yourself.  Now the majority of you probably have FEDERAL loans.  There are FOUR different varieties of these: Subsidized Stafford, Unsubsidized Stafford, Federal Plus, and Federal Perkins.

SUBSIDIZED STAFFORD LOANS:
Federal loans that DON'T accrue interest when you are enrolled at least half-time in school or if your loans are on any variety of deferment.

UNSUBSIDIZED STAFFORD LOANS:
Federal loans that DO accrue intereest when you are enrolled in school for any number of hours of ir your loans are under any variety of deferment.

FEDERAL PLUS LOANS:
Commonly referred to as Parent Plus Loans.  These loans are distributed in the parent's name and eligibility is based on the overall expense of attendance AND the parent's credit history, but are still distributed to the college as a student loan.

FEDERAL PERKINS LOANS:
This loan type is for students that are considered to have a greater financial need.  You will see a lower interest rate then other loans, but the amounts are also much less because of minimal funding for this loan type.

You will find that Stafford loans are on a FIXED RATE, but during the course of your college years you may see that fixed rate fluctuate!

If you look back a few years there were more student loan lenders on the market then anyone could count.  Then when the economy took a down turn they quickly began dropping off.  In today's student loan world there are very few left which has led to a world of CONFUSION as loans have been transferred from one servicer to another.  The first thing you need to do is go HERE to the National Student Loan Data System.  Then click on Financial Aid Review.  I'm forewarning you that it WILL request that you enter your social security number because it's a federal website and that is how they file your student loans as no two people have the same social.  In addition, you will need to enter your PIN number.  If you can't remember yours (honestly I couldn't because it was a random number set for me and not something I picked) then just click FORGOT PIN and then fill out the information.  Once you've logged in you will be able to see the information for EACH loan that you have including the servicer, amount, date of origination, outstanding interest and principle.  To see the detailed information you will simply need to click on each individual loan.  Many of you may be saying I went to the same school all four years I don't need to look at EVERY loan.  You absolutely do because they may all have different servicers!  All too often people are SHOCKED once they get a look at each of their individual loans because at the time you don't realize what you are signing, you just know that you're doing what you must to pay for school.

The only type of "student loan" you won't see listed here are Private Loans which do exist, but should be taken out as a LAST RESORT. They don't offer the same perks like low interest rates and there are often limited to no repayment options.  With private loans the bank can decide what they want to do because they are not covered under the federal student loans.  If you have somehow ended up with a private loan the only recommendation I have for you is talk to your individual bank or institution and determine what can be done.

We are going to take this slow and cover all the information you need to know about your loans so please bear with me.  I know this is frustrating and a lot to take in, but these are not to be messed with.  If you default on student loans they can in fact garnish your wages and take your income tax return.  So please, read the series and learn about what options you have so you don't end up in that situation!