NEWARK, Del.--(EON: Enhanced Online News)--Next month, many recent graduates will start repaying the money they borrowed for college. That’s because the six-month grace period on their student loans will end. Sallie Mae, the nation’s No. 1 financial services company specializing in education, shares tips and repayment advice from its customers.
“It is such a huge morale boost when you pay off a loan”
More than 1,000 Sallie Mae customers pay off their student loans every day. In the last academic year, that number totaled 379,480 customers who successfully repaid their loans, including the following customers who shared their advice on how to achieve full repayment.
When Forrest McClain graduated from New York University in 2011, he wanted to be a film producer. Today, he’s living his dream producing feature films, shorts, commercials and music videos in the Big Apple. He paid off his student loans this year by managing his spending habits.
“Set goals for your spending,” McClain says. “Get yourself into the habit of making monthly payments. After college, there are more than just loans to start paying for. Creating good spending habits earlier rather than later will help you down the road.”
Joshua King and his wife of Tallahassee, Fla., paid off their loans by making extra payments each month.
“It is such a huge morale boost when you pay off a loan,” King says. “Make a budget you can comfortably live on, while throwing as much of it as possible at your student loans. Make every effort not to slack off on that amount. And if you suddenly find yourself with a raise or, in our case, an extra income, use that additional amount to pay more every month toward debt relief. You’ll be so grateful you did once you hit payoff day. You will get there, and it will be that much sweeter when you do!”
M.W. Kwong of Sacramento, Calif., earned her undergraduate and law degree from George Washington University. She is now program director for a federally designated national policy center. She has advice for recent graduates who experience financial hardship.
“There were two periods where I was out of work for a significant stretch and it became difficult to manage my loans,” Kwong said. “Though I had to reduce some of the monthly payment amounts, I always paid something each month. When I was employed again, I made sure to try to make up for those months where I was making a smaller payment. I would suggest anyone paying back a loan try to pay back a little bit each month in some way. It will serve you well in the end.”
For additional guidance on repayment, Sallie Mae offers these five tips:
Understand your loans. There are different types of student loans and you may have more than one. Review the terms, interest rates and payment schedules. Also, be sure your contact information (i.e., mailing address, email and phone number) on file with your servicer is accurate and current.
Select the repayment plan that’s best for you. Federal loan borrowers may choose from different payment plans, including income-driven repayment plans. Income-Based Repayment or Pay as You Earn, where payments are based on income and family size, can cap monthly payments at 10 to 15 percent of income. Options for private loan customers depend on the loan program and the lender. Prior to disbursement, many Sallie Mae private loan customers select a repayment option that lets them begin to make payments while in school. They’ll graduate with less debt and an already-established habit of making payments.
Set a goal. Most borrowers pay off their loans on time or earlier. To meet your repayment goal, set a budget and stick to it. Sallie Mae’s student loan repayment calculator is a free and helpful tool. By paying more than the minimum on your student loans every month or whenever you can, you can also lower the total amount of interest you pay over the life of the loan.
Make your loan payments by the due date. Making your loan payments on time can help you build and maintain a good credit rating — and avoid the extra expense of late fees. Save time and money by enrolling in automatic bill payment. Sallie Mae customers who sign up for automatic debit may qualify for a .25 percentage point interest rate reduction while enrolled to make scheduled monthly payments.
Contact your loan servicer if you need help. Above all, if you find yourself experiencing financial difficulty or trouble managing your payment, call your loan servicer to explore the options available and keep your loans in good standing.
These simple tips can be the key to financial success for recent graduates. For more information, tools and resources, visit Sallie Mae’s financial literacy website, www.collegeanswer.com. Join the conversation on how to save, plan and pay for college at Facebook.com/SallieMae.
Sallie Mae (NASDAQ: SLM) is the nation’s No. 1 financial services company specializing in education. Celebrating 40 years of making a difference, Sallie Mae continues to turn education dreams into reality for American families, today serving 25 million customers. With products and services that include Upromise rewards, scholarship search and planning tools, education loans, insurance, and online banking, Sallie Mae offers solutions that help families save, plan, and pay for college. Sallie Mae also provides financial services to hundreds of college campuses as well as to federal and state governments. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.