When you make your final student loan payment find out what the payoff amount is. The current balance shown on your account and the payoff amount are usually different as a result of fees and interest. Once you make the final payment save the receipt confirming your loan has been paid off. The month after your final payment has been made login to your student loan account to confirm that your balance is still $0. This will reduce the chance of having any outstanding balance that could result in delinquent payments.
We are in the midst of college graduation season, that being said, it’s time to think about student loans! During your grace period don’t ignore your student loans, use this time to figure out the best repayment options and get started on making payments. There are many different repayment options available for federal loans so do your research and find the one that is best for your unique situation. And remember, the earlier you start your payments, the earlier your loans be paid off or forgiven, depending on your payment plan.
Are you a parent with a parent PLUS loan for your child’s education? The PLUS loan is a student loan and if you work in the public sector or for a non profit you may be eligible for public service loan forgiveness. PSLF forgives your remaining amount of student loans, once you achieve the required 120 monthly payments under the correct payment plan, tax free. Be sure to check out the eligibility requirements to see if you’re eligible.
Did you know that if you have student loans forgiven under the Public Service Loan Forgiveness the forgiven loan balance is tax free. However, if your student loans are forgiven under other types of income based repayment plans the forgiven balance is considered taxable income and you have to pay taxes on that balance in the tax year of forgiveness. If you are in one of these repayment plans you may want to start setting aside money now to cover the tax bill you will be faced with.
If you’re in high school or college, make yourself stand out from your peers by getting involved in the community. You can do volunteer work and join school/community organizations. This involvement will help you feel better as a person and will build you a great resume. It will also make you a more qualified candidate for many scholarships and will build your professional network.
Take out federal student loans before taking out private loans. Federal student loans usually offer lower fixed interest rates, less interest accrues on subsidized loans while you are in school, they offer the ability to access income-driven repayment options and depending on your career and type of repayment option you could also be eligible for Public Service Loan Forgiveness. Fed Loans also generally have a disability clause.
If you have student loans or expect to, create a spreadsheet to track these loans. It’s likely that every semester you will be taking out loans and it can be very easy to forget how many you took out, especially when they are through different loan providers. Things to include in your spreadsheet would be: what type of loan was taken out, who the loan provider is along with their contact information, when the loan was taken out, the amount the loan is for, what the grace period is, and what the interest rate is.
When your student loans go into repayment get setup with automatic payments. Many loan providers will offer you a lower interest rate for doing this. It will also help ensure you don’t miss a payment, which will have a positive effect on your credit score.
Are you thinking about a career in a public service field? If you are, be sure to check out Public Service Loan Forgiveness. Depending on the types of loans you have and what type of organization you plan on working for you may be eligible for Public Service Loan Forgiveness (PSLF). If you are eligible, be sure to set up your loan repayments with an eligible repayment plan.