After College: Common Student Loan Repayment Q and As

College Affordability Solutions gets approached by many student loan borrowers trying to mange the repayment of their federal college debts. Here are some of the most frequent questions they ask . . .

Q-1. Am I “locked in” to the repayment plan I originally selected?

No. You may change your repayment plan at least every 12 months. So annually assess whether another plan would better meet your needs. If so, contact your federal loan servicer to get that repayment plan.

Q-2. I’ve got some extra money. May I make a payment before I’m required to do so?

You bet! If you’ve got debt from federal Unsubsidized Loans, Graduate PLUS Loans, or Parent PLUS Loans the interest on them has been accumulating ever since you got them. If left unpaid, that interest eventually gets capitalized, or added to your debt’s principal, so it’ll cost you more to retire your debt. But paying before you’re required to do so eliminates or reduces that interest.

Q-3. My loan servicer sent me a repayment schedule showing the date my monthly payments are due, payment amounts, and how long I’ll make payments. Do I have to accept all this?

Not necessarily. You have options. Review your repayment schedule for information on how to check out all federal repayment plans. Select the one that best fits your needs. You may also change your monthly payment due date to another day within the month. And you may want to borrow an FDLP Consolidation Loan to lower your monthly payments by stretching out your repayment period.

Q-4. I can’t afford to make my next monthly payment. What should I do?

If you’ve got a temporary problem, talk to your servicer about postponing or reducing your payments through a deferment or forbearance. If you’re situation will last longer than a few months, your best option may be to use the Federal Direct Loan Repayment Estimator to compare your monthly payment amounts under all FDLP repayment plans for which you’re eligible. Then you may request that plan from your loan servicer. Or it may be best to borrow an FDLP Consolidation Loan to lower your monthly payments by extending them.

Q-5. Is loan forgiveness available after I make payments for certain number of years using conventional repayment plans?

No. Conventional repayment plans don’t provide forgiveness for what’s left of your debt after a specified number of years. And of those plans, only the Standard 10-Year Repayment Plan can qualifies you for Public Service Loan Forgiveness (PSLF). But you can’t get PSLF by starting with the Standard 10-Year Plan, only if you finish making payments under that plan after losing eligibility for income-driven repayment plans.

Do you have questions about repaying your student loans? Let College Affordability Solutions put its 40 years of student loan experience to work helping you. Call us at (512) 366-5354 or collegeafford@gmail.com to arrange a free consultation.

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