top 10 student loan tips for recent grads

The Top 10 Student Loan Tips for Recent Graduates

Whether you just graduated, are taking a break from school, or have already started repaying your student loans, these tips will help you keep your student loan debt under control. That means avoiding fees and extra interest costs, keeping your payments affordable, and protecting your credit rating. If you're having trouble finding a job or keeping up with your payments, there's important information here for you, too.

1. Know Your Loans: It's important to keep track of the lender, balance, and repayment status for each of your student loans. These details determine your options for loan repayment and forgiveness. If you're not sure, ask your lender or contact studentloansfaqs. You can also log in and see the loan amounts, lender(s), and repayment status for all of your federal loans. If some of your loans aren't listed, they're probably private (non-federal) loans.  For those, try to find a recent billing statement and/or the original paperwork that you signed. Contact your school if you can't locate any records.

2. Know Your Grace Period: Different loans have different grace periods. A grace period is how long you can wait after leaving school before you have to make your first payment. It's six months for federal Stafford loans (sometimes called Subsidized and Unsubsidized loans), but nine months for federal Perkins loans. For federal PLUS loans, you probably have access to a six-month deferment. The grace periods for private student loans vary, so consult your paperwork or contact your lender to find out. Don't miss your first payment!

3. Stay in Touch with Your Lender: Whenever you move or change your phone number or email address, tell your lender right away. If your lender needs to contact you and your information isn't current, it can end up costing you a bundle. Open and read every piece of mail - paper or electronic - that you receive about your student loans. If you're getting unwanted calls from your lender or a collection agency, don't stick your head in the sand - talk to your lender! Lenders are supposed to work with borrowers to resolve problems, and collection agencies have to follow certain rules. Ignoring bills or serious problems can lead to default, which has severe, long-term consequences (see tip 6 for more about default.)

4. Pick the Right Repayment Option: When your federal loans come due, your loan payments will automatically be based on a standard 10-year repayment plan. If the standard payment is going to be hard for you to cover, there are other options, and you can change plans down the line if you want or need to. Extending your repayment period beyond 10 years can lower your monthly payments, but you'll end up paying more interest - often a lot more - over the life of the loan. Some important options for student loan borrowers are income-driven repayment plans such as Income-Based Repayment and Revised Pay As You Earn which cap your monthly payments at a reasonable percentage of your income each year, and forgive any debt remaining after no more than 25 years (depending on the plan) of affordable payments. Forgiveness may be available after just 10 years of these payments for borrowers in the public and nonprofit sectors (see tip 10 below). To find out more about Income-Based Repayment and related programs and how they might work for you, contact one of our student loan specialists to create (or edit) your repayment plan.

Private loans are not eligible for IBR or the other federal loan payment plans, deferments, forbearances, or forgiveness programs.  However, the lender may offer some type of forbearance, typically for a fee, or you may be able to make interest-only payments for some period of time. Read your original private loan paperwork carefully and then talk to the lender about what repayment options you may have.

5. Don't Panic: If you're having trouble making payments because of unemployment, health problems, or other unexpected financial challenges, remember that you have options for managing your federal student loans. There are legitimate ways to temporarily postpone your federal loan payments, such as deferments and forbearance. For example, an unemployment deferment might be the right choice for you if you're having trouble finding work right now. But beware: interest accrues on all types of loans during forbearances, and on some types of loans during deferment, increasing your total debt, so ask your lender about making interest-only payments if you can afford it.

If you expect your income to be lower than you'd hoped for more than a few months, check out Income-Based Repayment. Your required payment in IBR can be as little as $0 when your income is very low. See tip 4 for more about IBR and other repayment options.

6. Stay out of Trouble! Ignoring your student loans has serious consequences that can last a lifetime. Not paying can lead to delinquency and default. For federal loans, default kicks in after nine months of non-payment. When you default, your total loan balance becomes due, your credit score is ruined, the total amount you owe increases dramatically, and the government can garnish your wages and seize your tax refunds if you default on a federal loan. For private loans, default can happen much more quickly and can put anyone who co-signed for your loan at risk as well. Talk to your lender right away if you're in danger of default.

7. Prepay If You Can: If you can afford to pay more than your required monthly payment - every time or now and then - you can lower the amount of interest you have to pay over the life of the loan. To pay down your loan more quickly, make sure to include a written request to your lender specifying that the extra amount be applied to your loan balance, and continue making payments each month. Otherwise, your prepayment may automatically be credited to a future payment and you may not be billed for the next month.

8. Pay Off the Most Expensive Loans First: If you're considering paying off one or more of your loans ahead of schedule, start with the one that has the highest interest rate. If you have private loans in addition to federal loans, start with your private loans, since they almost always have higher interest rates and lack the flexible repayment options and other protections of federal loans.

9. To Consolidate or Not to Consolidate: A consolidation loan combines multiple loans into one for a single monthly payment and one fixed interest rate. You can consolidate your federal student loans through the Direct Loan program,. For private consolidation loans, shop around carefully for a low or fixed interest rate if you can find one, and read all the fine print. Never consolidate federal loans into a private student loan, or you'll lose all the repayment options and borrower benefits - like unemployment deferments and loan forgiveness programs - that come with federal loans!

10. Loan Forgiveness: There are various programs that will forgive all or some of your federal student loans if you work in certain fields or for certain types of employers. Public Service Loan Forgiveness is a federal program that forgives any student debt remaining after 10 years of qualifying payments for people in government, nonprofit, and other public service jobs. Find out more at There are other federal loan forgiveness options available for teachers, nurses, AmeriCorps and PeaceCorps volunteers, and other professions, as well as some state, school, and private programs.

One of our experienced loan specialists will review your student loans. There is no credit card or payment required. Just fill out the form below.


How To Get Federal Student Loans Forgiven Based On Education Fraud

How To Get Federal Student Loans Forgiven Based On Education Fraud

Thousands of consumers have been duped, scammed, hustled and the like by schools across the country and now…finally…they have a chance to fight back.   A  petition program called the Defense to Repayment has been released by the Department of Education as a way to provide some reprieve to the rampant consumer fraud that has occurred in the education space.

Under the letter of the law, any consumer that feels they have been defrauded by the school they attended can petition the Department of Education under this provision.

The Department of Education cites the petition should include a comprehensive account of the fraud and deception that occurred, including specific acts of alleged misconduct of the school.  In addition, it should address the injury suffered by the borrower as a result of the school’s alleged misconduct.  And lastly, the petition should cite the state and federal laws that were violated while dealing with the school.

Do you know your consumer laws?

Unfortunately, submitting a successful petition is not as easy at it sounds.  Despite the sentiments from the Department of Education, the Federal Government is not really that motivated to discharge billions of dollars in student loan debt.   The Department of Education is required by law to respond to every petition, however without some knowledge of consumer laws and how they relate to the fraud that occurred, it would be easy to see a submitted petition getting improperly denied.

What Happens After A Petition Is Submitted

When  planning on submitting a petition, one can request their debt be placed in forbearance.  All the federal student debt that borrower has automatically goes into forbearance even if all forbearance has been exhausted.  This means the borrower would not have to make payments on any of their loans regardless if they are included in the petition or not.

In addition, if the loans are in default, any tax or wage garnishment stops.  This rule alone might be worth submitting a petition for some.  After the petition is submitted, the forbearance and the garnishment reprieve lasts for as long as it takes for Department of Education to respond to the petition. For those that may want to pay the interest while the debt is in forbearance or pay on the loans outside the petitioned loans, the borrower can do so.


Thousand Deceived By For-Profit Schools Can Now Petition Against Their Debt

If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, contact StudentLoanFAQ's and speak to one of our advisors about student loan forgiveness. You may qualify to consolidate or even wipe out your remaining student loans.


Salter College Lawsuit for Inflated Employment Rates

Salter College Lawsuit for Inflated Employment Rates

A settlement reached in December 2014 with Salter College means that more than 600 of its former students will finally be free from their massive student loan debts. The settlement requires Salter to pay over $3.75 million towards former students’ federal financial aid loans and $250,000 towards private student loans. This came as a result of claims that the school seriously inflated its employment rates on successful completion of their programs. This has been the largest settlement by that date as a result of investigations launched by Attorney General Coakley in the for-profit education sector.

Claims that Salter used misleading and predatory practices to entice and trick students into enrolling in what they thought would land them gainful employment ended with unemployed graduates unable to pay off their loans. The school’s main interest was getting their hands on federal and private student loan money and not providing high-quality educational services which would lead to gainful employment. The settlement affects those who attended health related programs at Salter’s New Bedford, Fall River, and West Boylston locations.

Inflated job placement success was presented to prospective students in the medical assistant, health claims specialist, and medical billing and coding programs which led students to believe they wouldn’t have any problems finding a job when they were through. The school claimed as high as 80% job placement rates but the real numbers come nowhere close to this as students were listed as successfully employed in their field even if they worked part-time, for temp agencies, and in unrelated fields.

Enrollment officials gave students the impression that the school was quite exclusive in who it enrolled and that due to limited seats they must sign up immediately or lose their spot. This meant that many students were not able to properly check out claims made by the school, did not understand the documents they were signing or have time to read them over, and felt they may lose their chance at an education. In reality, the school allowed anyone to enroll who met their criteria, that being that they had high school equivalency and could be approved for federal student financial aid.

Externships advertised by Salter were also not as they promised. The school’s advertising and enrollment officials stated externship was a requirement and would be arranged by the school. The majority of students ended up having to find their own externship hosts which caused significant delays in the completion of their programs. These externships were also indicated as being how students would find their employment after graduating and that most students found employment this way. In reality, little to no students found jobs with externship hosts.

An additional portion of the settlement states that Salter must accurately disclose in all its advertising and enrollment meetings their actual certification, admissions standards, job placement success and job listings, and ensure job placement assistance services are in place for students to actually find jobs in their field of study.

While this may end a financial nightmare for students in part, it doesn’t end the hardship entirely. Students are now left with useless degrees and would need to attend schooling again in order to achieve proper certifications, would have to lose countless hours studying and writing exams or papers, and lose a lot of time and money they could be earning in the workplace while doing it.

If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, contact StudentLoanFAQ's and speak to one of our advisors about student loan forgiveness. You may qualify to consolidate or even wipe out your remaining student loans.