Student Loan Management – What Can Happen If I Don’t Have My Loan Serviced?
What should I do if my student loan debt has increased substantially? This is one of the most common questions students ask their parents and college advisers when they are trying to decide on college tuition. If you have been granted a student loan, the question shouldn’t even be as important as knowing how much it is going to cost. Know how much you pay each month and why. There are some very common questions which arise about college loan repayments:
Why is total loan cost higher than the combined amount borrowed? You can’t put a total price on education because no two individual student loans are the same. Some students with good grades and credit can qualify for extremely competitive private loans, while others with low grades and/or poor credit may struggle to qualify for government loans. Private student loans have much higher interest rates than federal ones. In addition, your student loan payments may already be structured to make them fit into your new budget.
How are student loans paid down? Many students will receive subsidized federal loans from the government. These loans require no repayment until after you graduate. Many students will receive unsubsidized or private loans from either their parents or the student’s family and must then pay these loans back as soon as they start attending college. If you’re paying your unsubsidized loan directly from the government, you will most likely have to undergo a loan consolidation.
How do I consolidate private student loans if I don’t own a home? If you don’t own a home and are paying your student loans through a bank or credit union, you need to apply for federal assistance. The U.S. government will pay all of your bills, including your private loans, regardless of whether you own a home. Your payment amount will also be reduced for the amount of debt you carry on your credit card or vehicle. To find out which program will benefit you, contact the Department of Education.
If I own a vehicle or a credit card, do both need to be paid off at the same time? Usually both private student loans and federal loans are paid off at the same time. However, if one is not paid off, most student loans will offer you deferments that can give you time to work on paying it off while you continue to live on your own.
Do I qualify for federal student loans or private loans? The easiest way to find out if you qualify for federal student loans is to go to the Association to Advance Collegiate Schools of Financial Aid website. This website has a Student Aid Report section that includes a list of eligibility requirements for federal student loans. You can use this list to find out what your eligibility is and how to apply.
Can I qualify for a private loan as a backup? If you have bad credit and cannot qualify for federal funding, you may qualify for a private loan. Many private lenders offer federal student aid as well as private loans for those with bad credit. To find out if you qualify for either of these options, contact your loan servicer.
What if I don’t own a vehicle? Are my student loan holderships still considered part of my obligation? Many people have used a vehicle as their student loan servicer. In this situation, your servicer will send you a check in the mail each month. For most, this is still considered a form of student loan debt relief.