Student Loans

wow....

this is a great article.it is a problem of many people.........

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Savings and Debt Help

Kimberly,

As a mom of two college grads married to two college grads (all four with student loans), and as the person who has dealt with the financial part of all of it, including student loans, I feel your pain, but can also offer a few helpful suggestions.

1) Do NOTHING over the phone. Even if you can understand the CSR, you will not have any record of what was said, what was agreed to or contested, or any specific details. Every single student loan organization has a website where you have the ability to create your own account. Some very exceptional ones are Sallie Mae, Nelnet, and US Dept of Ed Direct Loans. They already have your vital info or you wouldn't have a loan with them, so setting up an account only requires you to confirm what they already know. No danger there.

There is much useful info on the account pages, as well as many of the tools you will need, such as forms that can be downloaded.

***Note: You requested info on consolidation of your loans: These forms are all on the website, accessible from your account, and can be filled out and submitted online, which I strongly encourage, because it is faster and there is less chance of your vital info falling into the wrong hands.

You requested info on the finances part: There are payment calculators online which can show you what your payment will be if you choose straight payment (the same amount every month), or graduated payment (smaller amounts for the first couple of years, gradually increasing over time), deferred payments (no payments for the first 1-2 years, then larger payments of a set amount each month), etc.

There is also much information on loan cancellation for military or low income teaching service.

And of course, everything you want to know about deferment and forebearance. More listed below on this.

2) Send ALL correspondence through this account via the email links they provide. Be specific, and require specific responses. Just like dealing with people on the phone or in person, you may have to ask specific follow up questions to ascertain what you need to know.

3) Along those lines, do not accept "generalities", such as "we are working on it" or "it will be done soon" or "I do not have that specific information". Get specific dates, forms, timelines, and get it in writing.

Now, just a few general pieces of information that are helpful:

1) Student loans, almost without exception, are guaranteed by the Federal Government through the Department of Education. This is to your benefit,as they have already decided and put into place what your interest rates are going to be, what length of time your deferment and forebearance can be, etc. It literally takes an act of Congress to raise your interest rate, and it can only be done once a year. That is good news for you.

2) Exhaust your deferment options before entering into a forebearance. Deferment - no interest accrues, forebearance - interest accrues. The most common deferments are: in school (you are still in school or are returning to grad school), military, 6 mos post-graduation, etc.

Forebearance can be for a longer period of time, but interest will accrue. Typical forebearace requests are for reasons such as: cannot find employment, cannot find full time employment, excessive medical expenses, etc.

3) Think about your overall financial picture, including your student loans. The student loans are the lowest interest rate you will probably ever see on a loan, so if putting your loans into forebearance for a year means you will be able to get caught up on car loans or house payments or whatever, then it can be the best move.

I know this can be very overwhelming, but take it one step at a time. The financial aid office at your college may be a great source of information. Or not. Educate yourself. The internet is a great tool for this.

Hope this helps!