If you’re one of the 44 million(ish) individuals with student loan debt in America, it’s time to listen up! There are things you need to know about how your loans and their repayment can affect you. We’re keeping the intro short this week and diving straight into the facts, but remember just one thing. What you’re going to read below is focused solely on federal student loans through the government, not private lenders. Okay, now that that’s all cleared up. It’s time. Ready? Let’s go!
1) When you graduate, you are automatically enrolled in the standard repayment plan for your student loans. Under the standard repayment plan, your payments are fixed each month and ensures that you pay off the loan in 10 years. This plan “saves” you the most money in the long run because it is only 10 years, and you end up paying less interest over time than any other program. As always, you can save even more in the long run by making extra payments towards the principal. However, since the regular monthly payment is not always manageable, there are other options listed below.
2) There are 8 different repayment plans available at the time I’m writing this sentence, though technically you can combine a few of them in ways that it technically means there are more options available, but that’s a story for a different time. Just remember, that if you struggle to meet that monthly payment, there is likely another option out there for you. For example, the graduated repayment plan starts borrowers out at a lower monthly payment, and gradually the payment increases, usually every two years or so. This plan is an excellent idea for those who may be starting at an entry level job, but will likely see an increase in pay over the next several years in their career. This isn’t to say that the graduated repayment plan is the end-all-be-all, just an example of how one of these plans work. You can do some research here to see the details of how all the plans work.
3) If you work in a public service job line, you may be eligible to receive loan forgiveness. The details of that are a whole different blog post. But the short version is, if you work for a non-profit or the government at any level, you could qualify to have your student loans forgiven after making payments for 10 years. You don’t have to work at the same place the whole ten years, but you do have to be employed full-time. If you want more information on this option, check out the available information here.
Of course, Apprisen is here to help through every step of your financial journey, so if you need someone to help you wade through all the information and disclaimers that may be involved in the process, just give us a call. We’d be happy to help solve the mystery of student loans and get you to a healthy place when it comes to your finances.