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Scholarships & Aid
Student Loan Management:
Tips and Tactics for the Life of Your Loans
The best debt management strategy is to be debt-free.
However, in order to pay for school, you may need to take
out student loans.
Planning for successful repayment should begin befor
e you
sign your first promissory note. Just as you are making a
commitment to your career by investing time and money in
higher education, you should make a commitment to your
financial future by effectively managing your student
loans from the start.
The following tips and tactics may help make it easier to
handle your student loan debt and repay your loans
successfully.
Get Organized
It's a good idea to save all of your student loan
documents and correspondence so you know exactly
what you've agreed to, what's expected from you as a
borrower, and how much you've borrowed. It may not seem
important at the beginning of the student loan process,
but when you are closer to repayment, you may need to
refer to some or all of these documents.
Start by setting up an easy-to-use record-keeping system
to store your student loan documents and correspondence.
There are many books and software products on personal
finance to help you get started. Whether you use file
folders, portfolios, binders, or envelopes, it is a good
idea to set up one folder for each type of loan or account
and keep the items sorted accordingly.
What should you keep?
Save documents such as your applications, promissory
notes, disbursement and disclosure statements, and loan
transfer notices.
Keep copies of all correspondence between you and your
lender(s), loan holder, and/or servicer(s) and your
school's financial aid office.
Maintain up-to-date addresses and telephone numbers of
your lender, loan holder, and/or servicer.
When speaking with anyone regarding your student loans, be
sure to jot down his/her name, the date and time of the
conversation, and a summary of what you discussed for
future reference or clarification.
When setting up your record-keeping system, be sure it's
comfortable to use—a system you'll find easy to maintain
over the life of the loan—and secure from theft or fire.
You should keep all student loan related documents and
correspondence until all education loans have been fully
repaid.
Manage Money Like a Pro
It has been said, "If you live like a professional while
you're in school, you'll live like a student once you've
graduated." In other words, it's important to carefully
manage your money while you're in school to minimize the
amount you end up borrowing, and in turn, the amount
you'll be responsible for repaying.
Consider the following:
Develop realistic budgets for while you're in school and
for after you graduate, so that you don't borrow more than
you need and can afford to repay your loans.
Live as cheaply as you can. Remember, you are a student.
You'll enjoy a more comfortable lifestyle once you've
graduated if you minimize your borrowing while you're in
school. Some ideas for how to be more thrifty include
getting a roommate, renting a movie instead of going out
to the theater, and bringing your lunch from home instead
of eating out.
Try to pay the full amount due for any credit card bill(s)
you receive.
Follow the budget you establish for yourself. Resist the
urge to use credit cards or your student loan funds to buy
things that are not within your budget.
Explore work-study or other part-time employment. It may
provide an opportunity for you to study or get valuable
professional experience, as well as help cover expenses.
Repayment Tips
Being informed about your student loan obligations is
crucial as you enter repayment. Default occurs when you
fail to repay the loan as agreed and/or meet the other
terms of your promissory note. Refer to the promissory
note for each of your loans before you graduate or leave
school so you know what your rights and responsibilities
are in repayment.
Here are some tips for successful repayment:
Send your education loan payments when due each month, for
the full monthly payment amount or more, regardless of
whether or not you receive a bill.
Understand the repayment options provided by your lenders.
With some options, you can minimize the total cost of the
loan by making a high monthly payment, while other options
may reduce your initial monthly
payments and may make it easier for you to afford your
loans early in your career.
Understand deferment and forbearance; exercise your
options when you need them.
Understand the pros and cons of loan consolidation and its
repayment options.
Contact your lenders, loan holders and/or servicers
immediately if you:
change your name or address
have questions about your billing statement(s)
have problems making your scheduled payment on time
want information on or applications for deferment or
forbearance.
Read and understand all correspondence you receive from
your lender, loan holder, and/or servicer, and respond
promptly if asked (or required) to do so.
For More Information
The financial aid staff at your school is probably your
most important resource. You can also consult publications
from federal and state governments, lenders, and
scholarship granting organizations, as well as financial
aid guidebooks that are available from your local
bookstore.
Another useful source of information is the Internet. On
Access Group's website, for example, you'll find
information about financing your degree, the importance of
good credit, managing your loans while in school, and
repaying your student loans. You can also use the
interactive calculators to help you plan your in-school
and out-of-school budgets, and to project the cost of
repaying your student loans.
Finally, there are several websites that have been
established by government agencies and other organizations
to assist students with financing their education. These
may be a good place to start your search: Project EASI and
U.S. Department of Education. |
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