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Student loans


Before You Borrow Student Loans
 
  • Make cost a factor when choosing a college. Compare tuition, room & board expenses, and annual fees for each school you consider. Check job placement statistics and average starting salaries for potential schools to see if graduates are having trouble repaying loans after graduation. Remember that college is a consumer decision. Like any large purchase, make sure the product you’re buying is worth what you pay for it.
 
  • Know all your options. There are several types of student loans out there. Federal student loans are the most common and come directly from the U.S. government. Private student loans are from private lenders, are often more expensive, normally require a credit check, and do not always offer the same flexible repayment plans available on federal loans. Complete and submit your FAFSA form as soon as possible to find out what federal aid you’re eligible to receive. Compare the terms and interest rates on each loan type before agreeing which to use and how much to borrow.  
 
  • Borrow wisely. Never take out more in student loans than you absolutely need. Ask your college if they offer other options like work/study programs that can help reduce your debt after school. Ask your lender what your standard monthly payment would be before taking out the loans to see if it will be affordable. Or use the calculators on the U.S. Department of Education’s website to figure it out yourself.
 
  • Plan ahead for repayment. Make sure you know when your first payment will be due, what your interest rate will be, and how to contact your lender if you have questions.
 
To learn more before you borrow:
 
 
Current Student Loan Borrowers
 
  • Know what you owe. Always keep tabs on your student loan balance, the kinds of loans you have, and who your lenders are. Use an online repayment calculator to check the cost associated with your interest rate.
 
  • Stay current and pay on time. Late or partial payments can do lasting damage your credit and lead to default. If your loans go into default—generally after about 270 days of delinquency—your options for repayment become much more limited. If you’re struggling to pay your student loans, don’t avoid the issue. Visit studentaid.ed.gov and use their repayment estimator to learn about different repayment plans and how they could help your situation, and then go over your options with your lender.
 
  • Keep in touch with your lender. If you move or change your contact information, don’t forget to let your lender know. Missing an update about your loans could set you back.
 
  • Know your options for paying off student loans. Many loans come with a grace period, meaning that you don’t have to start making payments as soon as you finish school. You may be able to defer payments based on financial circumstances or qualify for loan forgiveness if you take a public service job. You can also consider consolidating multiple loans into one manageable payment.
 
  • Never pay money upfront for help managing your student loan debt. In North Carolina, it’s illegal for someone to charge you upfront fees for help dealing with your debt. Stay in touch with your lender for the best options on managing your student debt.
 
  • If possible, get ahead on your balance. Save on interest and even shorten the life of your loans by paying off the most expensive loans first and paying down your debt early. Even a small amount extra each month can make a difference. Include specific instructions with these extra payments, directing that they be applied to the principal of your highest interest loans. Then monitor your account to make sure extra payments are applied correctly.
 
  • Monitor your credit. Keep an eye on your credit reports to spot errors or misreported debts. Catching mistakes early can help you protect your credit score. You’re entitled to one free credit report each year from each of the three nationwide credit bureaus, available at annualcreditreport.com or by calling 1-877-322-8228. 
 
For more information on managing student loan debt: