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The Basics of Repaying Your Student Debt

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After you finish your education, you may not be finished. You will now need to repay any student aid you received over your years in college. Although these loans are from the U.S. Department of Education, you do not pay them back directly. Federal student loans are repaid to loan servicers who collect payments and offer customer service. There are several servicers. If you are not sure who your servicers are, go to this student aid website. Make sure your keep your servicer’s contact information in your phone; it’s handy! This is your first step in paying back your student loans.

Here are some other helpful guides.

1. Always explore the Forgiveness Option. If your work provides a public service, all or some of your student debt may be forgiven. Check on the link above to see if you qualify.

2. If you do not choose a repayment plan, you will automatically be placed on a 10-year Standard Repayment Program. If you cannot afford the monthly payment on this plan, you may want to try an Income-driven Repayment Plan. You can then lower your monthly payment, but you will pay over a longer period of time than 10 years, and you will pay more interest. There is more than one income-driven plan. Check on the link above to compare.

3. Consider consolidating your loans. If you have several loans and several servicers, consolidation can be easier because you can pay them all in one single payment. Your servicer(s) should be able to help you do so.

4. Consider enrolling in an auto debit plan with your servicer. Your monthly payment will be taken out of your bank account automatically, and you get a .25% interest rate reduction when you enroll.

5. You never have to pay the government or a servicer any fees connected with your student loan repayment. If you are asked to pay application or maintenance fees, walk away.

And now, good luck with your repayment.