After College: Help! I Can’t Make My Student Loan Payments!

You’re repaying loans you borrowed to pay for college. But you often find yourself IMG_1086choosing between paying for essentials and making monthly loan payments. What should you do?

You’re in luck if, like 90% of today’s college borrowers, you borrowed federal loans. Washington offers multiple ways to get relief from your predicament. The question — which is best for you?

IMG_1087If you’ve not already done so, consider replacing your federal loans with a Federal Direct Consolidation Loan. These offer longer repayment periods and lower monthly payments if you owe more than $7,500. But look into consolidation’s advantages and disadvantages before going this route.

You can also tell your loan servicer will change your repayment plan. To check out how this’ll affect your payments use the Federal Student Loan Repayment Estimator. IMG_1090It already knows your loan balances and can tell you the repayment plans for which you’re eligible plus monthly payment amounts in each available plan. It can also determine how consolidation would impact your loan repayment.

If the reason you can’t afford monthly payments is temporary, look into getting a deferment to postpone your payments for up to a year. You’re entitled to deferment if you’re:

No deferment? Another temporary solution is asking your servicer for a forbearance. You’re not entitled to forbearance. It depends on your situation. But you can totally postpone or partially reduce your payments while in forbearance.

But be careful about deferment and forbearance. During the former, interest continues to build on your unsubsidized and PLUS loans. During the latter, interest keeps building on all your loans. Unpaid interest from these periods then gets capitalized (added to principle) when your deferment or forbearance ends.

If your trouble making payments is because of your monthly due date, ask your servicer if you may change your payment due date to another day that works better for you.

Act fast, because missed and late payments have really bad consequences.

College Affordability Solutions offers 40-years of experience working with various educational loan repayment strategies. Call (512) 366-5354 or email College Affordability Solutions for a no-cost consultation.


During College: Things To Watch For Before Signing An Off-Campus Lease

So your student found an off-campus apartment for next year. And now it’s time to execute the lease, which is strictly binding, and pay the deposit, which can be non-refundable. Guide her to do certain things before signing her name and turning over her money.

IMG_0532Tell her to read the lease thoroughly. This is a boring task, but she needs to understand everything in it. If she doesn’t, have her contact you, the local tenants association, or even an attorney for help.

She should zero in on key leasing terms and conditions. For example, when could her rent be increased, how does she get her deposit back, under what circumstances could she be required to vacate?

Advise your student to try to negotiate provisions out of the lease that’d give the landlord or property manager the right to:

  • Keep part or all of her security deposit for moving out early or normal cleaning and upgrades once she’s gone;
  • Charge her to repair or replace what she doesn’t break; or arbitrarily extend required periods for fixing or replacing things;
  • Enter her apartment without prior notice; and
  • Confiscate her property, unless she leaves it behind after moving out.

Coach her to check out the actual unit she plans to rent, if possible. It may be damaged or neglected in ways that’ll never show up in the model unit, and she’ll have to accept those deficiencies or fight with her landlord to get them fixed.

Tell her to conduct all business about her residence in writing. She needs datedIMG_0535 receipts or cancelled checks on all payments she makes, written commitments about how long repairs will take, and responses to all landlord notices in writing. Have her keep copies in her records in case her property’s management tries to rip her off.

Anything the landlord or his agent promises verbally that runs counter to the lease is a warning sign. She’s may be dealing with an unscrupulous character, so she should probably look for another place.

It’s important for your student to consult current residents or the local tenants organization about landlord/management’s record in living up to their responsibilities. Lease problems today’s tenants are experiencing are lease problems she’ll likely experience, too.

Finally, suggest she review local codes and ordinances on landlord/tenant responsibilities — who does inside and outside maintenance, how are landlord-tenant disputes settled, and so on? She can probably find these rules at public libraries or city offices and websites.

Yes. College is expensive. But if you’re trying to identify ways to make it less costly, do a no-cost consultation with College Affordability Solutions by calling (512) 366-5354 or emailing

During College: What to Consider Before a Student Chooses an Off-Campus Residence

Many students are now looking to move into off-campus housing next year. It’s natural. Leaving the dormitory’s cramped, closely supervised, heavily regulated environment is a natural part of growing into an independent adulthood.

But there are dangers your student may not recognize in the heady rush toward off-campus living. A bad living arrangement may lead to poor grades, dropped classes, and even dropping out, which can cost him (or you) lots of money.

Here are some issues your student should consider while searching for that off-campus apartment . . .

Is it affordable? New off-campus residences tend to be high-amenity facilities with IMG_0526everything from resort-style swimming pools to granite countertops and upgraded cable TV packages. But luxuries mean rent, deposits, and utility bills that may be outside your student’s budget. Costs may be cut by getting one or more roommates, and your student, like thousands of others, will definitely find he can save by selecting an older, more basic residence.

Roommate(s)? Speaking of roommates, your student should be extra careful about who he lives with. It’s not just about friendship. He needs someone he’ll get along with in close quarters, who’ll work to resolve conflicts, and on whom he can count. Off-campus living isn’t like the dorm — if his roommate moves out two months into the lease, your student will have to pay full rent and utilities.

Does the facility have what he needs? Notice the reference to needs not wants. A place offering sufficient space, bedrooms, bathrooms, kitchen facilities, and parking is more important than all those glitzy niceties.

Getting to and from campus? Easy access to classes is, of course, a necessity. If an IMG_0529apartment’s not within walking distance of campus, can your student get there on low-cost institutional or municipal bus systems?

Safety? Your student should check out issues of crime and safety in and around every facility he’s considering. Have him check police reports and talk to current residents for such information.

Landlord and/or management company? Too often, off-campus residences have crooked landlords and predatory managers. No matter how much they fail to deliver what’s promised to this year’s tenants, there’ll always be new victims who’ll unwittingly rent from them next year. Urge your student not to rent until he’s quizzed current residents and checked with local tenant organizations about complaints against the owner and management.

Look here next Wednesday for what to watch out for in the lease for an off-campus residence.

Got questions about college costs? Need advice on making college more affordable. Contact College Affordability Solutions by calling (512) 366-5354 or emailing for a no-cost consultation.


After College: Things to Do As Your First Student Loan Payment Comes Due

If you graduated from college last spring, chances are your obligation to begin repaying your Federal Direct Loans has begun. If you’ve not yet heard from the student loan servicer Washington hired to collect your payments, you need to contact it immediately (see below) because you’ve got some important things to do:

Choose Your Repayment Plan. Your servicer sent you a notice by email, U.S. Mail,IMG_0410 or both. This notice invites you to select the repayment plan that works best for you at this point in time. If you don’t select a plan, you’ll automatically be assigned a Standard Repayment Plan under which you’ll pay off your Federal Direct Loans within 10 years by paying the same amount every month.

No matter what your repayment plan, you can change it by contacting your servicer. However, if you’re paying under an income-based or income-contingent plan, you can switch only after making payments for at least three months.

Decide How to Pay. You may pay by cash or check. But the most convenient way to pay is to give your servicer permission to draw your monthly payment out of your bank account via “electronic funds transfer.”

Your Payment Due Date. Your notice will also tell you the date on which your first payment is due. This date is in January for most spring graduates.

Payment must arrive at your servicer within 15 calendar days of this date or you’ll be behind in your payments. But remember, if you’re mailing your payments, assume it’ll take the post office about 10 days to deliver them.

IMG_0411You’ll have the same payment due date every month. However, if at any time this date doesn’t work for you, you may contact your servicer and request a different payment due date provided you’re not behind in your payments.

If You Can’t Afford to Make Payments. Call your servicer. Describe the issues affecting your ability to pay. Ask if you qualify to postpone your payments through a deferment or forbearance. But remember, postponing payments often IMG_0412generates additional interest on your Federal Direct Loans, so you’ll spend more to repay them in the long run.

Contacting Your Servicer. Access your records in the National Student Loan Data System to find your loan servicer’s contact information.

You’ve got lot’s of options. Make well-informed, wise choices to help set yourself up for a smooth and successful repayment experience.

Need advice about your student loan payments? Contact College Affordability Solutions at (512) 366-5354 or for a no-charge consultation.


During College: Timely Advice To Help Your Student Manage January Expenses

January can be expensive for college students. A new academic term often means paying for travel back to school, tuition and fees, books and supplies, and room and board. Add leftover holiday bills and January spending can quickly get out of control.

How to best resolve all this without jeopardizing progress toward graduation? These are big, intertwined tasks, so your student may need guidance from you, her parents, or even a skilled money management professional.

Linda Matthew, an experienced Accredited Financial Counselor with Money Mindful Personal Financial Coaching, endorses a four-point approach.

(1) Your student should confirm exactly how much she owes and when payments are due using her records, including credit card and other receipts, to make a list of these.

(2) Urge her to prepare to pay her outstanding debts and soon-to-be expenses by IMG_0367writing out a spending plan for the first quarter of 2018.

This plan should include your student’s school-related costs. If she must pay 100% of these by a certain date to enroll and succeed in classes, she needs to pay them by that date even if doing so means spreading other payments over the next two or three months.

But payment may not be required on every institutional charge as the term begins. Some colleges offer payment plans that delay one or more installments until later in the term, freeing up funds for other January expenses. Some also offer short-term tuition loans. However, these usually require extra fees so she should take those costs into consideration.

Your student may also want to investigate refinancing her credit card debt. Doing so could reduce her interest and even postpone a payment on her new card’s balance.

IMG_0366(3) If your student ended up dealing with unexpected January expenses because she didn’t plan for this past Christmas, it’s absolutely critical that she begin saving for next holiday season as part of her spending plan. No sense in courting another problem in another 12 months.

(4) If extra income’s needed, suggest your student search out a short-term, part-time job if she’s not already working. Another way to raise money is to file for her federal tax refund ASAP. The IRS issues 90% of tax refunds within 21 days of receiving 1040 forms.

The holidays are over, but advice about managing expenses is one of the best gifts your student will ever receive!

To contact Linda Matthew at Money Mindful Personal Financial Coaching for help resolving your financial issues, call Linda at (530) 220-3369 or email her at
Have questions for College Affordability Solutions? Call (512) 366-5354 or email


During College: Help Your Student Avoid Overspending on Holiday Gifts

On average, Americans will spend $983 for holiday gifts this year. For those pressed for funds, even a fraction of this amount can create a new year filled with the stress of buyer’s remorse, exorbitant credit card bills, and insufficient funds for necessities.

IMG_0205Such problems overwhelm many college students just as a new term begins. Stress is the number one impediment to academic success in college. And the top two reasons why college students drop out are their need to work and earn money, and their inability to pay tuition and fees.

But you, as a parent, can help your student avoid overspending on holiday gifts.

First, manage expectations before the gift exchange. Thoughtful gifts don’t need to cost a lot. Tell your student he need not buy expensive presents. Quietly remind family members he can’t afford to spend a ton and, if your family members share holiday wish lists, lobby for some low-cost items he can afford.

Second, coach you student to establish a realistic gift budget fitting his limited finances, omitting gifts to casual friends, and dedicating a certain amount for each person on his list.

Retail businesses are exceptionally good at separating consumers from their money. IMG_0206So help your student avoid getting hoodwinked by marketing strategies designed to entice more spending than he can afford — constant sales, decoy pricing, loss leaders, loyalty cards, retail credit, etc.

Counsel your student to minimize extra fees — convenience fees, credit card fees, service charges, shipping costs, etc. Paying with cash or a debit card can avoid some of these fees. Comparative shopping can help avoid or diminish others, especially if shopping online.

Encourage him to limit self-gifting — i.e. treating himself to something while shopping for others. Whatever he’d buy can probably go on his holiday wish list.

Urge him to pick up some seasonal work to earn a few bucks that’ll help cover gifts and other holiday expenses.

Advise your student to track holiday spending. It’s helpful to establish a gift budget, but only if he stays within it. Tracking his expenditures, which simply requires a pencil and paper, helps him do this.

Finally, remind your student that spending restraint is critical to a truly happy new year!

College Affordability Solutions can provide other strategies for helping to keep your student’s costs low. Feel free to call (512) 366-5354 or email for a no-cost consultation.


During College: Your Undergraduate Needs a Spending Plan!

Last week’s post discussed how every $100 prepaid within 120 days after her fall Federal Direct Unsubsidized Loan funds are disbursed can reduce an undergraduate’s repayment amount by an additional $175. Urge your student to make such a prepayment. But remember, she shouldn’t prepay loan funds she’ll need.

IMG_9872How can she know what she’ll need? The best way is for you, as a loving parent, to use your real world experience to help her create an effective spending plan (also known as a budget, though many students consider that a dirty word, right up there with terms like diet and pop quiz!).

A great time to do this is when she’s home for Thanksgiving in a few weeks. Here are key components:

  • Time Period: Make the plan for the right time period. That’s at least each academic term but, if your student depends heavily on financial aid, it should probably stretch to when she’ll receive such aid for the next term.
  • Time Increments: Split the plan into weekly or monthly increments and use it to anticipate each increment’s income and expenses, which may vary by week or month.
  • Income: Plug in funds your student will receive — financial aid, take-home pay, money from you or other family members, savings withdrawals, etc.
  • Expenses: Help your student break down what she needs to spend in each increment. The U.S Education Department offers great guidance on what to include in a student’s spending plan and on building a spending plan.
  • Needs versus Wants: It’s hard, but help her separate needs (crucial necessities) from wants (spending on goods and services your student could get through college without).
  • Savings: Coach your student to stash away some money for emergencies; also for predictable future spending — travel between school and home, holiday and other gifts, maybe even spring break.
  • Review and Adjust: Your student’s actual income and outlays since leaving for IMG_9873college can help predict income and expenses for upcoming time increments. Review her fall pay stubs, credit/debit card records, and even paper notes on cash outlays. At the end of each of the next few months, help her compare such records to her plan, then refine her plan as necessary.

An effective spending plan will benefit your student during and after college. Help her learn how to build and execute one. It’ll be some of the best parental support you’ll ever provide.

College Affordability Solutions will help you tailor various strategies for making higher education more affordable. And to make sure the price of our services doesn’t become an impediment to them, they’re all provided at no charge. Call (512) 366-5354 or email to access these services.