• Get organized. With most college graduates carrying up to 12 student loans with their diploma, it’s very important to compile a list of what you owe, who you owe it to, when it’s due and the identifying information for each loan. Add a reminder to your calendar when every payment is due and maintain student loan checklist to help keep you organized.
• Make the first payment. Between the high number of loans and the six-month deferral, if a loan payment is going to be missed, it will be the first one.
• And then make it automatic. Automatic loan payments are a smart bet for two reasons: they ensure the payment is made on time and they often come with a .25% or .50% interest rate deduction.
• Consider consolidation carefully. Federal loans can be consolidated, but offer no incentive to do so; private loans can be consolidated, but sometimes at the expense of a higher interest rate. Identify which loans are federal and which are private, and the loan rates for each before you consolidate. A loan specialist will be able to help you identify your options.
• Claim the student loan interest deduction. The deduction can be worth up to $2,500 per year on both private and federal loans, and it can be easy to miss when filing. The above-the-line deduction is an important one, so build that reminder into your calendar, too.
• Keep your lender in the loop. If you lose your job or ability to pay (or both), have a conversation with your lender as soon as you can. Federal student loans offer temporary suspensions for short-term financial difficulty (think job loss or maternity leave). Keep in mind, however, that interest continues to accrue, so you may need to consider an alternate repayment plan that will give you a lower monthly payment, but a stretched out term.
• Don’t skip your payments. Not paying your student loans is not an option. There’s no getting away from them. Even if you declare bankruptcy, private and federal student loans are almost impossible to discharge.
At Busey, our team of professionals can help you plan—no matter your stage in life. Visit any Busey location or call 1.800.67 | Busey.