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You’ve done it – you graduated from college, earned your degree and have the diploma to prove it. You’re ready to take that next step. There’s one thing, however, that’s still tying you to your postsecondary education.

Your loans.

Although your schooling may be over, your financial aid has not ended yet. Within six months of your graduation, you will need to start paying back the money you borrowed at the start of your education. Before you get overwhelmed at the thought of drowning in debt, know that there are ways to keep yourself above water while paying back your loans. Keep the following tips and tricks in mind while paying back your loans, and make your repayment as stress-free as possible!

  1. Choose the right repayment plan
    You may not know it, but you don’t have to stick with the repayment amount you’re given when you first begin to pay off your loans. The standard plan helps you pay off your loan quickly – it’s structured to help you pay off your loans in 10 years. However, your monthly payments will be on the higher side.
    If you don’t mind taking longer to pay off your loans, you can get yourself into an income-driven repayment plan, which typically gives you a lower monthly payment that will help you pay your loans off in about 20-25 years. However, that also means you’ll be paying more interest over the course of your repayment, making your total amount paid likely more than the original amount of your loan.
    Choosing the wrong repayment plan can have detrimental effects on your budget, your bank account and your credit score if you fall behind in your payments. Make sure you get into a repayment plan that works for your situation, and helps you achieve your goal – a quick repayment time, or lower monthly payments. You can even consolidate your loans for a better repayment option.
    Finally, also look into federal loan forgiveness programs when you’re researching repayment options. Income-driven repayment plans can offer loan forgiveness at after 20 or 25 years, meaning that even if you have a balance at the end of that time, it can get forgiven by the government. Additionally, check with your employer to see if they are part of the Public Service Loan Forgiveness Program. The Public Service Loan Forgiveness Program forgives the remainder of your loans if you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. Qualifying employers include the government (any level), non-profits that qualify for 501(c)3 tax-exempt status, or non-profits without 501(c)3 status that provide qualifying public services.
  2. Don’t miss a payment
    After you choose your repayment plan and set your monthly payment amount, find out how you can set up automatic payments through your loan servicer. By having your payment automatically deducted from your bank account every month, you won’t have to worry about forgetting to make a payment on time or missing one altogether.
    Missing or late payments are strikes on your credit score. If you are in a situation where you cannot afford your next payment, contact your loan servicer to learn about your options to reduce or postpone your payment, and keep your loans in good standing.
  3. Consider all your options before postponing a payment
    Of course, there may come a time when you are experiencing some financial hardships and your loan payments need to take a backseat to other necessities. The two ways you can temporarily stop your payments are through deferment or forbearance. While they may be helpful to alleviate immediate hardship, they don’t actually help you pay back your loan. Your loan will continue to accrue interest, despite you not making payments, and your interest may even capitalize. This means, when you resume your payments, your loan balance will be even higher than it was before.
    If you need some relief in your loan payment, make sure you consider other options before flat-out postponing your payments. Contact your loan servicer to see if you can get put on a different repayment plan that can lower your monthly payments.
  4. Never pay for loan advice or help
    While you’re browsing the internet or researching information about your loan, you may encounter programs that will charge you a fee for loan advice. The U.S. Department of Education and loan servicers will never charge you for their service.
    However, your loan servicer can only help you if they can reach you. Keep your contact information up-to-date with your loan servicer, so they can quickly and easily get in touch with you to talk about repayment options or any changes or concerns there may be with your loans.
  5. Contact College Now with any questions you have about your loans
    If you have more questions about your loans or are unsure about how to start paying back what you owe, College Now won’t charge you for loan help and loan advice, either. If you want to consolidate your loans, learn about ways to lower your monthly payments or ask questions about loan forgiveness, contact College Now Greater Cleveland or stop by our Downtown Cleveland Resource Center today. We will never charge for our services, and we will make sure that you are on the best track to repay your loans in a way that you can afford and that makes the most sense for your post-graduation situation.