Tips For Recent Grads Paying Off Student Loans

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It's graduation season for college students across the nation and a recent study shows the average student loan debt is close to $30,000.

Aside from understanding which service is providing their loan, it's equally important for graduates to understand their options when it comes to filing a forbearance or deferment.

Mike Chen, a Casper College student says, "you know, I've never actually heard those terms, like forbearance, before. I''ve actually never heard of them."

The first step in paying off student loans is understanding the options. Student's going back to school can choose to defer payment on their loan until after graduation and if unable to make a payment, that's when it's time to file a forbearance.

Jenny Livengood of Reliant Federal Credit Union says, "forbearance, as far as I know, that just is asking for like a month or two extension onto your loan to not have that payment."

After graduation, depending on the loan type, there may be a grace period of six months before making a loan payment and advisors recommend students to make payments during this time to substantially lower the total amount of the loan.

Darry Voigt, Casper College Executive Director says, "whatever you pay during that six month grace period after graduation goes directly against the principle and you can save a lot of money by paying down your loan during that grace period."

Voigt says if there's one piece of advice he'd give a recent graduate about managing their student loans, it would be to keep the loan provider up to date... even if it's not possible to make a payment.

"The department of education will be their lender, but they have several servicers. So, they should find out who is servicing their loan and maintain contact with them."

If the grad is having trouble finding that first job after graduation and unable to make monthly payments, advisers say to make contact with the loan company.

"If you're having trouble paying, that's when you really need to contact and say what can you do for me?"

Advisors say it's important to understand the terms of a loan and if possible, consider consolidating them to lower the interest rate.

If considering filing for a forbearance, ask the loan service provider how to begin the process.