How to Handle Problems Repaying College Loans
Answers to common questions about managing your college money repayments.
It’s not uncommon for students to have difficulties when it comes to how to pay for college loans. While you have all the data you need to make an educated decision about how much money you need to help pay for your tuition and other costs toward your college education, you don’t know what your financial situation will be after you complete your college degree.
If you’ve left your university or college program, started taking classes toward your degree part-time or have graduated with your certificate, bachelors degree or other degree, you’ll be required to start paying back your college loans. That means a big chunk of money will be coming out of your paycheck or savings each month to pay your lender back for tuition, room and board and other college costs.
While federal aid grants you a grace period of a few months before those payments kick in, if you’ve taken college financial aid in the form of private loans, these repayments will start right away. Adjusting to the payments for your college loans or struggling with unexpected financial hardships can make repaying your loans especially challenging. Here are answers to common questions about how to handle repaying your money for college.
What should I do if I miss a payment?
Contact your lender as soon as possible. Ask them what your options are, and if there are any consequences for missed loan payments. Handling your loan issue quickly will prevent your bad situation from getting worse.
What should I do if I don’t think I’ll be able to make the full amount on my upcoming payments?
If you’re able to pay some money but not the full amount, look into switching your repayment plan. Keep in mind that extending your repayment plan will give you lower monthly payments now, but the amount you pay for the college loan in the long run could be higher.
What do I do if I can’t pay anything toward my college loan?
If you’re unable to pay anything on your college loan this month or for several months, you may be able to go into loan deferment or forbearance, in which you postpone your payments for a temporary amount of time. Inform your lender about your college financial aid situation and see what options may be available to you.
What are the consequences of missed payments?
There are serious repercussions to not repaying college loans. In the short term, you may be required to pay late fees. Your loan could also go into default and your credit rating could suffer.
Considering pursuing an advanced education degree, like a masters degree? You won’t be able to receive federal aid or other financial aid for school if you neglect to pay for your college education. Also, having bad credit will make it harder for you to rent apartments, get a mortgage on a house or even rent a car. If a company does a credit check as part of their hiring process, bad credit could lose you that job. Money could also be taken out of your wages to pay for the college loans.
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