Manage and Repay Student Loans

0:00 College or career school is an important step in achieving your future goals,

0:05 and there are many financial aid options to consider.

0:08 Did you know that a federal student loan can be a great way to help pay for school?

0:13 After all, a grant, work-study job, or a scholarship

0:17 can be a huge help, but these forms of aid may not cover

0:20 the full cost of attending school.

0:23 So if you decide to take out a federal student loan,

0:25 it’s important to understand what you are getting and be a responsible borrower.

0:30 Getting a loan is a big decision. You might be paying your loans back

0:34 for 10 years or more, so take your time to decide.

0:37 And remember to accept only the loans that you need,

0:41 because you’ll have to repay them once you’re out of school.

0:43 Here are a few things to keep in mind when deciding how much to borrow.

0:47 Do some research: Make sure that your school is the right fit for you

0:52 both educationally and financially.

0:55 Location, location, location:

0:57 The amount of money you need to borrow can depend a lot

1:00 on where your school is located.

1:02 In-state schools and community colleges

1:04 may cost less than out-of-state schools.

1:07 And finally, getting an idea of your future income

1:10 is also important when deciding how much to borrow.

1:13 Starting salaries vary greatly depending on your career path,

1:17 so it’s worth thinking about how the amount of your loan will affect your future finances.

1:21 After all, your student loan payments should be only a small percentage

1:25 of your salary after you graduate.

1:27 Once you’ve decided on your school and figured out how much money you should borrow,

1:31 you’ll need to sign a promissory note, which is an agreement to repay your loan.

1:35 Make sure you keep a copy for your records.

1:38 If you do take out loans, you’ll need to keep in touch

1:41 with your loan servicer when repayment begins.

1:44 Your loan servicer will make this easy for you

1:47 you by offering web, email, and phone contact options.

1:50 If you make this investment in your future,

1:52 being an informed, responsible borrower can pay off in a big way.

1:56 If you have questions or need more information,

1:59 please visit StudentAid.gov.

0:00 If you've taken out a federal student loan,

0:02 there will come a time when you have to repay what you've borrowed.

0:05 That time comes after you graduate, leave school,

0:08 or drop below half-time enrollment.

0:10 But don't worry, in most cases, you won't have to begin making payments right away.

0:14 For instance, you won't have to start repaying your direct subsidized loan

0:18 or direct unsubsidized loan for 6 months,

0:21 and your Federal Perkins Loan begins repayment after 9 months.

0:24 If you have a PLUS loan, your loan enters repayment after your final disbursement,

0:28 but you may be able to postpone your payments.

0:31 Before your loan enters repayment,

0:34 you'll be contacted by a loan servicer.

0:36 A loan servicer is an organization that manages loans

0:39 and collects payments on behalf of the lender.

0:42 For loans you receive from the U.S. Department of Education,

0:45 you will submit your payments to your loan servicer.

0:47 If you have a Perkins Loan from your school,

0:49 you'll make payments to your school or your school's loan servicer.

0:53 Your loan servicer can help you select the repayment plan that works best for you.

0:57 There are different types of plans that you can choose

1:00 choose based on the type of loan you received and how much you've borrowed.

1:03 For example, you may select a fixed monthly payment.

1:07 But some people opt for a graduated repayment plan

1:10 where payments start low and increase every two years.

1:13 If you think you'll need a longer amount of time to pay back the loan,

1:16 you may be eligible for an extended repayment plan.

1:19 There are also options that base your loan payments on your income

1:23 income in order to help you better manage your debt.

1:25 If you ever find yourself having difficulty making payments,

1:29 contact your loan servicer immediately to discuss the options available to you.

1:33 If you need to look up the contact information of your loan servicer,

1:37 we have a great resource available.

1:39 The National Student Loan Data System can provide your loan servicer's name

1:43 and contact information, as well as other details about your loan.

1:47 Visit www.nslds.ed.gov.

1:54 If you are interested in estimating your monthly loan payments,

1:57 or if you would like more information, please visit StudentAid.gov.

00:00 If you have a federal student loan, there are several options

0:04 available to help you manage your debt.

0:05 And if you’re having trouble making your loan payments,

0:08 contact your loan servicer immediately.

0:10 Your loan servicer will walk you through your options.

0:14 For example, you might consider changing your repayment plan.

0:18 There are several repayment options available to you.

0:21 Most borrowers start off with the standard repayment plan,

0:24 which offers a fixed payment over a 10-year period.

0:27 However, you can lower your initial monthly payments

0:31 using a graduated repayment plan that starts with lower

0:34 monthly payments that gradually increase over time.

0:37 Or if you qualify, you may be able to lower your monthly payments

0:41 by extending them over a longer period of time.

0:45 Finally, you may be able to choose a repayment plan

0:47 that ties your monthly payments to your income.

0:50 If you meet certain requirements, you may be able to defer

0:54 or temporarily postpone your payments for a variety of reasons,

0:58 including a return to school, unemployment, or military service.

1:02 If you’re having trouble making your loan payments,

1:05 but do not qualify for a deferment, your loan servicer may grant forbearance,

1:10 which allows you to postpone or reduce your monthly payment

1:13 for a limited period of time due to financial difficulty or certain other reasons.

1:18 Contact your loan servicer to see if you qualify for deferment or forbearance.

1:23 If you have multiple federal loans,

1:26 consolidating them into one loan may also help you better manage your debt.

1:30 In addition to having to make only one federal student loan payment each month,

1:35 your monthly payment amount may be lower

1:37 since the length of your repayment schedule may be extended.

1:40 Consolidating your loans is easy and can be done

1:43 any time after you leave school.

1:45 Switching repayment plans, exploring deferment and forbearance options,

1:49 or consolidating your loans may help you

1:52 better manage your student loan payments and avoid default.

1:55 Remember, if you’re having difficulty making payments,

1:59 contact your loan servicer immediately to discuss the pros and cons of these options.

2:04 If you have questions or need more information,

2:07 please visit StudentAid.gov.