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PAYING OFF COLLEGE LOANS
LINKS |
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There are at least two U.S. Department of Education websites useful for paying off federal government loans. Very likely, one is sufficient. The two websites are: |
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PAYING OFF COLLEGE LOANS
INCOME BASED REPAYMENT PLAN |
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INCOME BASED REPAYMENT (IBR) is a new repayment plan for the major types of federal loans made to students. Under IBR, your required monthly payment is capped at an amount that is intended to be affordable based on your income and family size. |
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PAYING OFF COLLEGE LOANS
ORDERING YOUR LOANS
FOR EXTRA PAYMENT |
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IF FINANCIALLY ABLE, FIRST CONSIDER MAKING EXTRA PAYMENTS ON YOUR HIGH iNTEREST LOANS. Whenever you can afford to pay more than the required loan payment on a high-interest rate loan (usually credit card debt and private student loans), do so. For loans that require a monthly payment it may be necessary to write a separate check and send it with instructions to put the money toward the loan principal otherwise the lenders may apply the extra payment to a monthly payment. Make sure to verify that the lenders followed your instructions. |
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PAYING OFF COLLEGE LOANS
LOAN CONSOLIDATION |
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LOAN CONSOLIDATION is the process of combining one or more eligible educational loans into a single new loan. Consolidating federal loans may be financially attractive. UCLA answers the question HOW TO CONSOLIDATE FEDERAL LOANS by answering the two questions:
What is a Federal Consolidation Loan?
What Loans Can I Consolidate?
KEEP IN TOUCH WITH YOU LENDERS. If you moved, contact your lenders. If your student loan has moved (that is, your loan provider has sold your loan to another lender), you may need to contact your new loan provider.
The NATIONAL STUDENT LOAN DATA SYSTEM (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, and other Department of ED programs. NSLDS Student Access provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data.
PICK THE TERM OF YOUR FEDERALLY GUARANTEED STUDENT LOANS. With their relatively low interest rates and possible tax benefits, federally guaranteed student loans are begging to be as long term as possible. "Federally guaranteed student loans generally carry a ten-year term but there are typically other options as well, particularly" if you have consolidated. "Depending on your balance you may be able to spread payments over a period as long as 30 years. With graduated plans, your payments start out low and increase over time.
There are also INCOME BASED REPAYMENT PLANS under which your payments rise with your pay.
Our advise is to minimize your payments on government backed loans in order to step up your payments on higher cost credit cards and private loans.
TAX DEDUCTION FROM THE FEDERAL GOVERNMENT. The maximum deductible interest on a qualified student loan is $2,500 per return. This is not available if you are claimed as a dependent or if you file as married filing separately. There also is an income restriction but, with the way things are, you will be lucky if you earn enough to even get close to this income restriction. |
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PAYING OFF COLLEGE LOANS
WHAT IF UNABLE TO PAY OFF
YOUR COLLEGE LOANS |
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FIND A SOLUION TO STUDENT LOAN PROBLEMS (e.g. what do do if behind on payments).
SEEK STUDENT LOAN FORGIVENESS. Under certain circumstances, federal and state governments as well as some non-profit organizations will cancel all or part of an educational loan. This practice is called LOAN FORGIVENESS.
GOING BACK TO COLLEGE MAY DEFER YOUR LOAN. If you go back to college at least half-time, you may be able to defer your student loan for up to three years. |
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