There is so much excitement in the air with celebrations across the Country for all of the hard work that students have done to accomplish their dreams and goals that includes a very expensive college degree.  Hopefully graduates has heeded to the guidance of their financial aid counselors and academic advisers.  Student loan payments are usually due within six months after graduation; time will pass by so fast that you will not believe it.  This loan should be kept at the top of your things to pay list; the ramifications of defaulting on your student loan could become a very costly oversight.  Graduate, beware!   Below are a couple of ways new grads can tackle their student loans.

Money Magazine (Weston 2014) says, “Reach out for help”.

Borrowers typically can get access to their loan accounts online, and doing so can make managing multiple loans easier. Graduates should take the time to update their addresses and emails with the loan servicers so that they don’t miss critical communications.

“Explore payment options”

Income-based repayment plans, along with generous deferral and forbearance options that offer payment relief for up to three years, can keep the vast majority of federal student loan borrowers from defaulting, says Reyna Gobel, author of the book CliffsNotes Graduation Debt.

Private student loans offer fewer options for strapped borrowers. But some forbearance or deferral is typically available for those who are unemployed or facing other economic setbacks.

Even graduates who can manage their first payments should investigate alternatives.

Pay as You Earn, a federal income-based program, could lower payments to less than 10% of the borrower’s income—and those who work in public service jobs could be eligible for forgiveness of any remaining balances after 10 years of payments. (Those who work in non-public service jobs can get forgiveness after 20 to 25 years, depending on when the debt was incurred.)

If you’re unemployed or not earning much, Pay as You Earn can lower your payment to zero—while still keeping you out of default. Extended and graduated payment programs also can make payments more manageable. For more information, check the Department of Education’s student aid site and the Consumer Financial Protection Bureau’s Repay Student Debt tool.

Remember to take important steps to avoid defaulting on your student loan; your credit score could suffer a devastating blow should this happen.  Take action now to start paying if you are able to make payments before your loans are due.  If you are unemployed there are options for you as well.  Stay in touch with your lender and ask questions regarding every option available that fits you circumstance.

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