Student Loan Management

Tips and Tactics for the Life of Your Loans

The following tips and tactics may help make it easier to handle your student loan debt and repay your loans successfully.

Get Organized

It’s a good idea to save all of your student loan documents and correspondence so you know exactly what you’ve agreed to, what’s expected from you as a borrower, and how much you’ve borrowed. It may not seem important at the beginning of the student loan process, but when you are closer to repayment, you may need to refer to some or all of these documents.

Start by setting up an easy-to-use record-keeping system to store your student loan documents and correspondence. There are many books and software products on personal finance to help you get started. Whether you use file folders, portfolios, binders, or envelopes, it is a good idea to set up one folder for each type of loan or account and keep the items sorted accordingly.

What should you keep?

• Save documents such as your applications, promissory notes, disbursement and disclosure statements, and loan transfer notices.
• Keep copies of all correspondence between you and your
lender(s), loan holder, and/or servicer(s) and your school’s financial aid office.
• Maintain up-to-date addresses and telephone numbers of your lender, loan holder, and/or servicer.
• When speaking with anyone regarding your student loans, be sure to jot down his/her name, the date and time of the conversation, and a summary of what you discussed for future reference.

Clarification.

When setting up your record-keeping system, be sure it’s comfortable to use—a system you’ll find easy to maintain over the life of the loan—and secure from theft or fire. You should keep all student loan related documents and correspondence until all education loans have been fully repaid.

Manage Money Like a Pro
It has been said, “If you live like a professional while you’re in school, you’ll live like a student once you’ve graduated.” In other words, it’s important to carefully manage your money while you’re in school to minimize the amount you end up borrowing, and in turn, the amount you’ll be responsible for repaying.

Consider the following:

• Develop realistic budgets for while you’re in school and for after you graduate, so that you don’t borrow more than you need and can afford to repay your loans.
• Live as cheaply as you can. Remember, you are a student. You’ll enjoy a more comfortable lifestyle once you’ve graduated if you minimize your borrowing while you’re in school. Some ideas for how to be more thrifty include getting a roommate, renting a movie instead of going out to the theater, and bringing your lunch from home instead of eating out.
• Try to pay the full amount due for any credit card bill(s) you receive.
• Follow the budget you establish for yourself. Resist the urge to use credit cards or your student loan funds to buy things that are not within your budget.
• Explore work-study or other part-time employment. It may provide an opportunity for you to study or get valuable professional experience, as well as help cover expenses.


Repayment Tips

Being informed about your student loan obligations is crucial as you enter repayment. Default occurs when you fail to repay the loan as agreed and/or meet the other terms of your promissory note. Refer to the promissory note for each of your loans before you graduate or leave school so you know what your rights and responsibilities are in repayment.

Here are some tips for successful repayment:

• Send your education loan payments when due each month, for the full monthly payment amount or more, regardless of whether or not you receive a bill.
• Understand the repayment options provided by your lenders. With some options, you can minimize the total cost of the loan by making a high monthly payment, while other options may reduce your initial monthly payments and may make it easier for you to afford your loans early in your career.
• Understand deferment and forbearance; exercise your options when you need them.
• Understand the pros and cons of loan consolidation and its repayment options.
• Contact your lenders, loan holders and/or servicers immediately if you:
o change your name or address
o have questions about your billing statement(s)
o have problems making your scheduled payment on time
o want information on or applications for deferment or forbearance.
• Read and understand all correspondence you receive from your lender, loan holder, and/or servicer, and respond promptly if asked (or required) to do so.


For More Information

The financial aid staff at your school is probably your most important resource. You can also consult publications from federal and state governments, lenders, and scholarship granting organizations, as well as financial aid guidebooks that are available from your local bookstore.

Another useful source of information is the Internet. On Access Group’s website, for example, you’ll find information about financing your degree, the importance of good credit, managing your loans while in school, and repaying your student loans. You can also use the interactive calculators to help you plan your in-school and out-of-school budgets, and to project the cost of repaying your student loans.

Finally, there are several websites that have been established by government agencies and other organizations to assist students with financing their education.

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