A student comes to Kean University with a dream in mind, a dream they wish to develop before taking on the world. But college has a price tag, and some students are not able to pay their college tuition in full without a loan here and there. It’s great to take out a loan for the cause of education, but do not forget about the strings attached to the borrowed money. Remember those loans taken out a few years ago? Well, that was not free money, and after one’s college career is over with, the payments start to come in on a calculated schedule. So now the money is borrowed and it’s time to give it back, but the process is confusing. It is time to shed some stress connected to loans.
Loans are loans no matter what name they go by, but they do have varying reimbursement processes. First off, there are four primary education loans: direct subsidized loan, direct unsubsidized loan, Federal Perkins Loan, and PLUS Loan. For the direct loans, after a student drops below half-time student status, graduates, or leaves college, there is a grace period of six months until payments are expected to be made. If a Federal Perkins Loan was taken out, a student must check with the college they attend to find out when the repayment process begins. With PLUS Loans, the course of repayment is different than the others. After the final disbursement of the loan is given, the receiver of the loan must begin making payments. With all four loans, it is possible to postpone the start of payments. To look into delaying repayment, check the respected loan’s website.
Prior to a loan entering into the repayment stage, the loan recipient should expect to be contacted by their assigned loan servicer. A loan servicer is an organization a lender hires to collect the money they are owed. The servicer will discuss all the available payment options and together it will be decided the best payment plan. The typical plan consists of a fixed-payment amount made on a monthly basis. Another type of repayment plan is one based off of a person’s monthly income intake. An alternative payment plan some decide to use is a graduated plan. With a graduated plan, payment amounts start off low and slowly increase in an increment of two years. It is not uncommon for recently former students to run into some financial problems, causing them not to be able to pay the full amount of their repayment. If this situation occurs, the individual simply needs to contact their loan servicer and a new plan will be established.
Life sometimes can be hectic, so hectic that a person may forget their designated loan servicer’s contact information. Rest assured, all the much-needed information on a loan servicer can be discovered through the National Student Loan Data System, found at www.nslds.ed.gov. This resource also provides a person with details about their loan and repayment plan.
Going from high school to college warrants a significant amount of change, but going from college to the working world, some even bigger changes are on the agenda. There will be moments of stress and frustration, but one area that should be stress-free is loan repayment. Save some time and money and figure out ahead of time which payment plan is the best fit. Don’t worry, be happy, because after all, a new journey is about to begin.
