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5 Things to Know Before You Start Repaying a Student Loan

Jan 13, 2013

National Center for Educational Statistics, 20.2 million students enrolled in colleges in 2012. Overall, around 41% of 18- to 24-year-olds enrolled in college, and an additional 507,000 students were attending non-degree institutions of higher learning.

We know that success comes with higher education. Having a higher education degree means, you are able to fulfill all your dreams. Nevertheless, what can be the reason, for which the number of college attendees every year is so less.

In America, the college fees are too high and it becomes almost impossible to afford higher education, especially for the mediocre families. Between 2001 and 2010, the cost of a university education soared from 23% to 38%, as per the statistics. Therefore, you can guess why students drop their education after school and opt for some vocational training.

In this case, most of the student who has high career aims opt for student loans in order to pursue their dreams. However, if you take a student loan, keep in mind that you need to repay them.

Loans are associated with pains. It is the pain of debt. If you are unable to repay the student loan on time, then you get under heavy debts. If you are under the pressure of a heavy debt just at the beginning of your career, then it looks like big hurdles in the path of success.

Ref: (Consumer Financial Protection Bureau announced that student debt passed $1 trillion. It grew by $300 billion from third quarter of 2008 and other forms of debt shrank by $1.6 trillion, according to tabulation by the Federal Reserve Bank of New York.)

Which image clicks your mind after reading the above stat? - Pair of balls and chains, closet full of white T’s?? They are big nightmares to all those who are under debts.

Once you are able to complete higher education, then you have to start repaying the amount you borrowed. However, before you do it, research the options available to you and figure out a plan.
If you apply for a student loan then make sure that you have the following information:

  • How shall you repay the loan if it gets out of control? 
  • How shall you get rid of the high interest? 
  • How shall you consolidate into a single loan if you have a multiple number of loans?

So, get some good suggestions on student before you start repaying the student loan.
5 Surefire Methods to Know before Starting the Repayment of Student Loan


1. Speculate the Post-Grad Life


If you are going to opt for a student loan for your studies, then do a little research before you apply. First, you need to have a cost benefit analysis of the degree you are going to earn. Do consider lateral things like, interest rates, potential salary after graduation and expectation from the job market in your field. From that, you can imagine the career picture of your after-graduate life.

2. Know Your Grace Periods


If you borrow a Stafford Loan, then the grace period will be 6-months (after you finish off your graduation, leave school or drop the course before you start repaying your loan). Remember, this is not similar to the private loans, which do not have a grace period at all. If you borrow private loans to finance your higher studies, then you need to start repaying as soon as you finish of your college.

3. Consolidating Your Loan


Consolidation of loan helps to combine the student loans into one single loan, which have a single monthly payment. This will help you to lower the payment option and the interest rate. At the same time this options stretches out the payment term and could end up costing more at the end.

4. Consider the Interest Rates


Federal loans most of the time comes with lower interest rates than the private ones. And this is the reason, for which it makes sense to pay more money towards the private loans and get rid of them in the beginning.

5. Have a Repayment Plan


Until you inform the provider will automatically enroll you in their standard repayment plan this is a plan that needs regular payment for a fixed time. If you go for other repayment plans, then do read the fine print. The Graduated Repayment Plan may be beneficial to you if your salary is low and there are expectations of a raise in next few years.

Universities are of the opinion that the value of a degree cannot be reduced to an economic number. And don’t you think that it is some what cynical. The main reason universities have been able to increase their revenue so much is because of loans given to students based on what they are told they will one day earn.


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