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Student Loans: The Roadmap to Repayment

2 THE BIG PAY-DOWN: GRADS, GET READY TO START REPAYING THOSE SCHOOL LOANS College students in the U.S. today are graduating with more debt than ever. Student loan debt is unique in that it can't be discharged in bankruptey, so you are seriously on the hook for those dollars you borrowed. Follow the timeline below to make sure you get on the right track with repayment at a level you can afford. THE BIG PICTURE Average U.S. Student Debt in 2009 $24,000 NATIONAL AVERAGE WASHINGTON D.C. Highest Debt $30,033 UTAH Lowest Debt $12,860 IN JULY OF 2010 the total student loan debt in the U.S. surpassed credit card debt STUDENT LOAN DEBT CREDIT CARD DEBT $850 BILLION $828 BILLION $1 TRILLION IN 2011 total combined student loan debt in the U.S. is set to pass STEPS TO TAKE CONTROL OF YOUR STUDENT LOAN If you're a recent student, chances are you have debt to pay off. Here are the steps to take in order to make sure you are successful in your repayment. START FIND YOUR FEDERAL STUDENT LOANS RELAX FOR NOW Understanding your debt is key to taking control. Sometime in months one through three. gather all your federal student loan information: Utilizing the National Everyone gets six months before federal student loans are due to decide which payment plan is right for them. Use this time to Student Loan Data System website. netp:/www.nsids.ed gov O On the site yau will find all yaur student loans. Without that ist. you will not know exactly what yau ewe. A O Explare all paymant options Draw up a master list of all yeur debts, detailing the amount you owe and whe the servicer is far each lean (such as Direct Leans, Get your budget ready fer this estra spense AES, Sallie Man, Wells Fargo, etc). 3 EXPLORE YOUR OPTIONS Use student loan calculators to compare three major repayment options STANDARD CONSOLIDATED INCOME BASED REPAYMENT REPAYMENT REPAYMENT PLAN PLAN PLAN Repay your lean in equal payments oves 10 years time. For a 40.000 lean with an average interest rate of a, your Contect Direct Lean servicing to Payments adjust annually based on yeur djusted gross inceme and family sie. A single cellege graduate with adjusted gross income of 50,00 whe doesn't live consolidate all your federal student loans into one loan extended to 15 te 20 years For a 540,000 loan with an average interest rate of. conselidated for 25 years. your monthly payment is S40.32. in Alaska or Hawaii would pay S170. monthly peyment is 3 However, payments will vary as income changes en an annual basis. but the amount will never rie above the 10 year repayment plan amaunt. Hyeur laan isn't paid ef in 25 years of payments, the remainder is fargiven. $460.32 $279.53 per month 10 years per month x 25 years remainder is forgiven ater 25 years of disoretionary 6 .......... Pay off in 10 years Pay o in 25 years per month 25 years PRE-BUDGET PLANNING Practice inserting each payment amount into your budget in months three and four before selecting your repayment plan. If you get a new job during this period, you can alter your budget at that time. Recalculate income- based payments for your new salary. Start communicating with your servicer in month four about deadlines for selecting your repayment plan Practice inserting payment TIP BE DEBT-ICATED: MAKE YOUR PAYMENTS Choose your repayment plan carefully, but remember that you can switch plans or request payment postponement in the future. Even it you intend to pay your loan the old feshioned After you've chosen your repayment plan, tigure out your method for way, with a check and a stamp. making those monthly payments be sure te sign up fer enline payment toa, just in case you O O Online er Mail Payment Pres- Provides more fiexibility within the payment window. The Automatio Debit: run eut of checks near your des date ora payment gets last in the mail. Having your banking into loaded up in advance will save you time and allow you to meet your due date, avoidinga Pros Saves time and hassle Avoids late payment fees. Many lenders offer an interest rate sarlier you mailUtranamit payment, discount for electronie debiting Cons - Risky if your cash fiow is inregular. Many lenders only allow payment on a particular day lan ar the mare you pey off in principle Ability to add a litle astra to payment prineipal, if vou have spere . END cash. Consisky if vou're abaentminded busy or disorgenieed nasty late fee and a possible just before ue datel. ding to your eredit PROS tast pamant PROS mee flesibility ONLINE risky for thase with irregular CONSk ud missedlest peyments k of misedlest CONS MAIL inceme mint. Source: hetp://projectonstudentdebt.arg/state_by_state-data.php com

Student Loans: The Roadmap to Repayment

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For all you recent grads enjoying the summer sun, don’t forget that come autumn, student loans will come a reckoning. Use this time now to plot out your repayment plan. This guide will show you how ...

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