Managing Your Student Loan Debt
ASLA is here to help you make wise debt management decisions. We are available to answer your repayment questions, help set up automatic debit to make your monthly payments or help find repayment options when you are having financial difficulties.
Federal Student Loan Facts
- Federal Student Loans (and most private student loans) MUST be repaid. There are very few circumstances that may qualify for discharge, cancellation or forgiveness of those loans.
- Unsubsidized Stafford Federal Loans interest accrues if not paid while in school. The interest will be added to the principal of the loan annually (capitalized) which means the total principal increases.
- NEVER borrow more than NEEDED even if you are eligible for more.
- You have a 6 month grace period after leaving school before repayment begins.
- Your loan servicer can help you figure out what repayment option is best to help in your circumstance whether it is an income-driven repayment plan, career-based forgiveness program or extended repayment plan.
- Deferment and forbearance are options to temporarily postpone your payments under special circumstances such as returning to school, a loan forgiveness application review or unemployment.
- It is important to understand how much you owe in principal on your loan versus how much you owe in interest. You also need to be able to understand how paying just as little as $25 a month more on principal can significantly reduce the amount of interest you pay over the life of the loan. You can run the numbers yourself using this Student Loan Repayment Calculator from www.edfinancial.com/
- If you are not sure who services your student loan, visit the National Student Loan Data System. You can see a complete history of your student loans, beginning balance, list of servicers and contact information.
- DON'T DEFAULT ON YOUR STUDENT LOAN! Default is the term used for failure to pay your student loan. The Federal government will impose serious consequences in an effort to collect to student loan payments including, but not limited to:
- High collection fees and interest
- Negative credit rating and score
- Wage garnishment
- Lien on tax refunds
- Employment risks
- Legal action for outstanding balance
- Loans are not included in bankruptcy filings
- If you have a defaulted loan you can rehabilitate the loan by contacting the collection agency. You must make 9 on-time payments for an agreed upon amount. The collection fees will be added to the outstanding principal of the loan(s). A complete description of the student loan rehabilitation program is available on the U.S. Department of Education's Federal Student Aid website.