Experts remind college grads to be proactive about student loans

It’s a truly exciting time of the year for young people throughout Florida and across the nation. That’s because many will be — or perhaps already have — marched across a stage to receive their college diploma, the culmination of years of hard work and, for many, a major financial commitment.

Indeed, statistics show that as many as seven in ten college students graduate with an average of roughly $30,000 in student loan debt. Despite this reality, at least one survey showed that most recent college graduates were unaware of the interest rate they were paying or even how much they owed.

While ignorance was indeed bliss during college, experts indicate that borrowers will want to devote some attention to this matter not long after hanging up their caps and gowns. That’s because repayment for federal student loans will begin anywhere from six to eight months after graduation, while the repayment period can commence even sooner for private loans.

The purpose in sharing this information isn’t to cause unnecessary alarm — particularly among those who have yet to find employment or plan their next steps — but to impress upon young people how being proactive can prevent surprises and protect their financial record.

Some student loan tips offered to recent college grads by experts include:

1. Take the time to familiarize yourself with all of your loans from the amounts and the interest rates to the repayment periods and the monthly due dates.
2. Ensure contact information is current at all times in order to prevent accidental defaults and enable the lender to contact you.
3. Create a budget to determine whether you need to consider pursuing an income-based repayment plan. If you are pursuing more education or unemployed, this exercise will help determine whether to pursue a deferment or forbearance, with the former allowing payments to be put on hold for up to three years interest-free and the latter allowing payments to be put on hold for up to one year with interest accruing.
4. Register for automatic payment, as many lenders will provide an interest rate deduction for taking this step, and explore whether an employer has a loan repayment program.
5. Once employment is steady and finances are in good shape, carefully consider options such as refinancing, consolidation or even extending a payment plan to lower monthly payments.

Here’s hoping the foregoing information has proven helpful. Please remember that even if you continue to experience significant financial problems despite your best efforts that you are not without debt relief options.