Student Loans | Financial Literacy for Class 6 PDF Download

Student loan debt is almost as routine today as a car loan or credit-card debt. Few college graduates leave school without some sort of student loan to repay.

Most students don’t ask if they’ll go to college, but rather where they will go. And it may not be until a few decisions later that they consider how to afford tuition. Years later, when school ends and real-world living begins, the afterthought of student loans takes its toll and the bills start rolling in.

Student Loan Facts

• 40 million Americans have at least one outstanding student loan.
• Americans owe more than $1.2 trillion in student loans, making up 6 percent of the total national debt.
• The average borrower graduates from college owing $29,000.

Paying Attention to Loans While You’re Still in School

• In addition to signing the promissory note for your loans, take the time to examine exactly when your first payment will be due and how much it will be. Put that future date and cost on paper and in the time between now and then, begin saving money to repay your loans.
• If you can work a few hours during the week, on the weekends or just holidays and summers, you can begin your post-college years with a surplus of money that can go directly toward loans.

Do's & Don'ts

• DO find out when your grace period ends.
• DON’T miss your first payment because you forgot to mark your calendar.

Staying in Control When You Leave or Graduate

• When the time to start paying comes, you have options for repayment. The Federal government offers longer term payment plans as well as graduated repayment options which allow you to bulk up your income and get some job experience under your belt before making larger monthly payments.
• From there, your next step will be making payments on time and reducing the principal if possible by paying more than the minimum that is due. For public service careers, you may qualify for loan forgiveness.

Do's & Don'ts

• DO make more than the minimum payment to reduce your principle.
• DON’T skip payments or accrue late fees.

When Repayment Isn’t an Option

• During certain seasons of life, your income may be severely limited and affording student loan payments just isn’t possible. Fortunately, loan servicers are aware that situations like this occur and have precautions in place to help students get through these difficult times.
• Qualifying circumstances, like unemployment or health problems, can make you eligible for deferment or forbearance, which allow you to temporarily postpone or reduce payments. Contact your loan servicers to find out your options. If you just ignore loan bills, your account may receive delinquency or default status.

Do's & Don'ts

• DO communicate with lenders if you are unable to make payments.
• DON’T ignore student loans when you’re struggling financially.