Expert advice on student loan repayment options
In 2020, 55% of students who earned a bachelor’s degree graduated with student debt
(InvestigateTV) — Nearly one in five Americans, including many recent college graduates, has student loan debt, according to NerdWallet.
Cherry Dale, a financial coach with the Virginia Credit Union, said new graduates typically must begin repaying student loans six months after graduation.
Dale said it’s important to log into loan servicer sites early to determine when payments start and how much they will be.
“My advice would be to call the university or contact the lender that holds the loan and go through the different plans,” Dale said. “There’s also a calculator on the federal aid website that students can go to navigate and put in different numbers to see which loan plan is the best.”
Dale walked through the three main different types of student loan plans:
Standard plan: A basic ten-year plan with set payments and interest throughout the loan term. This is the quickest repayment plan.
Graduated repayment plan: Repayment terms are income based. Repayments are adjusted to income level every two years.
Extended repayment plan: This plan is only available to those with over $30,000 in student loan debt. It is a 25-year term with set monthly payments for those who qualify.
Dale explained that there are other plans to consider, and borrowers typically have the option to switch repayment plans once a year.
Dale urged borrowers to stay on top of the paperwork required with any repayment plan and to consult with their college or university if there are any questions.
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