Pay Back Student Loans: Here’s How

Upon completing college one of the first major emotions that young people feel is relief. Finally, after four long years of study it is time to move on with life and start working towards your personal and professional goals. However, there is often one looming reminder of college days that new graduates at first forget: student loans. They are so easy to take since they do not require repayment until after graduation, but once you have hit that time adjusting to a working world with bills to pay can be rough.Take StockWhether you have found a job or not, it is important to use the 6-month grace period offered for student loan repayment to take stock of all the money you owe and to whom. Student loans are commodities and often get bought, sold and traded by various financial institutions throughout the years that you spend in college – this is true whether your loans are private or federal. You need to learn who holds each of your loans and discuss repayment options with them as a primary step in getting a hold on your repayment.This is even more important if you think finding gainful employment may take awhile. For the unemployed and the underemployed there are still several additional options that you can discuss with your lender.Option 1: Income-Based RepaymentIf you do have a job, then it is possible to work out a system with your lender whereby they deduct a portion of each paycheck on a biweekly or monthly basis. This way the repayment will be tailored to your income and an automatic payment that does not need to be fit into a monthly budget.Option 2: ConsolidationIf you took out several loans from both private and public lenders in order to finance your college education the best option for you after graduation is likely consolidation. In doing this you concentrate all your debt into one monthly payment and extend the prepayment period from 10 to 30 years. This choice had its advantages and drawbacks. Your interest rate can be very high for consolidated loans over $30,000 and the though the extended term reduces monthly payment remember that you will be paying back these loans long after you have celebrated many class reunions and you may even still be paying them when your own kids go to college.Option 3: Loan Forgiveness through ServiceThe United States government has several programs that are designed to forgive certain student loan amounts through public service. The first, and most well-known, option is joining the military. If you enlist after graduation you can wave up to $20,000 of student loan debt through the GI Bill. The other option, Americorps and its off shoot Teach for America, offer jobs in high risk urban and isolated rural areas that will wave up to $5,000 per year of loan debt in addition to regular salary payments. There are also several high-needs fields such as social justice, social work and health services that will either pay loans back for you or forgive your loan debt if you pledge to work in those fields for a specified time-frame.They Never Go AwayIf you have a lot of student loan debt it is easy to get overwhelmed by the payments and the options in a declining economy. It is important to remember, however, that student loans are forever. Unlike car loans and mortgages that can be waved through bankruptcy and repossession, student loans will never go away. That is why it is important to work with a lending professional and outline a specific plan to get your student loans paid off so that you can start enjoying the fruit of your labor debt-free!