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Graduating in a Week – Only 6 Months to Start Repaying Student Loans

I remember the day my parents helped me move into my first dorm room at the University of Central Florida. They were all tears, and “I miss you already,” while I was, “OK, I’ll see you in 3 months for Thanksgiving!”

I was ready to leave the nest. Ready to explore my “adulthood.” Ready to be free!

Well, for the past 5 years I’ve enjoyed my freedom and the opportunities I’ve had to grow as a woman. Now that I’m graduating, though? I’m ready to climb back into bed between Mommy and Daddy, into the comfort of their home and the security of their bank accounts.

Sure, they might have a mortgage to pay, cars to maintain and a son at a private university. No big deal. My brother’s on the baseball team. He gets taken care of. Besides, payments on his $80,000 of student loans won’t start for another 3 and a half years!

Mine start in 6 months.

It’s finals week, which means final reports and presentations are due all at the same time, and final exams all run on the same days. With sleepless nights studying, hours spent hard at work, and graduation literally around the corner, my student loans are closer to the bottom of my priority list right now.

I’ve been getting emails from my student loan provider, reminding me that I should create some sort of payment plan for myself. I agree I should.

I just need to figure out how.

Student Loans: How Much Do I Owe?

As of Feb. 25, 2013, according to my Nelnet Federal Student Loan Snapshot, I owe $27,505.80. Of course it doesn’t reflect any “subsequent changes” to my account.How much do I owe in student loans?

I took two types of loans out- Stafford Subsidized and Stafford Unsubsidized. Stafford loans are the most common federal loans offered to eligible undergraduate and graduate students. But what’s the difference between Subsidized and Unsubsidized?

Although it’s best to try to avoid student loans altogether, Direct Subsidized Loans work a little more in our favor. They’re available to undergrad students with financial need. The school decides how much money can be borrowed, based on financial need, and the government picks up the tab on interest accrued while in school, during the 6-month grace period, and even during a period of deferment!

So, for me, my Subsidized loan balance is $15,420 with $0 in accrued interest.

On the other hand, undergrad and graduate students are eligible for Direct Unsubsidized Loans, without proving financial need. Again, the school determines the amount that can be borrowed, considering the cost of tuition and fees and other financial aid offered. The major difference between Unsubsidized and Subsidized loans is that the student is responsible for the interest accumulated during all periods.

My Unsubsidized loan balance is $10,080 with an additional $2,005.80 in accrued interest.

Student Loans: Who Do I Pay? When Do I Start?

I first applied for student loans in my sophomore year of college, when I lost my Florida Bright Futures Scholarship and couldn’t afford to pay for school on my own. That thing I mentioned earlier, “freedom,” it took advantage of me freshman year while I took the scholarship for granted. I guess I thought my Banana Republic paychecks from a year of selling jeans and suits to retired and wealthy Palm Beach men and fancy dresses to their wives would hold me over for 3 more years.

I got a nice whiff of reality real quick.

Since 2009, I’ve gotten emails from Nelnet- my student loan provider.  I’ve basically ignored all the courtesy emails they’ve sent up until recently. All this time, they’ve tried to build a relationship with me, and I’ve shut them out. So typical to reach out and pay attention to them now that I need them, right?

Nevertheless, I have a feeling the representatives at Nelnet will be my best friends for the next few years. If they’re going to be taking money from me every month, why not have some kind of relationship? That way, if something ever comes up and for whatever reason I can’t make a payment, they may be more inclined to help me out.

If you’re unsure who your student loan provider is, visit your financial aid office. They will have that information on file for you. You can also try looking through your “ignored” emails.  The information might be in there somewhere.

I have a little over 6 months before I have to start making payments on student loans, thanks to the grace period.

Now is the time to start saving. I have to start putting a percentage of my paycheck away for my student loan payments. I can’t assume that living paycheck to paycheck will be sufficient. If an emergency comes up, I’ll be stuck. Then what?

There are a few options available for graduates who can’t pay back student loans, like loan modification and consolidation, deferment, forbearance and forgiveness. Unfortunately, there’s not an option to make them disappear.

Some of these options will allow you to temporarily stop or lower your student loan payments. However, interest may continue to accumulate. Good communication with the loan provider is key in these situations. Keep them informed of what’s going on with you, so they’ll be more understanding and be able to give you the best options available to you.

Student loans aren’t scary. They can be overwhelming and a little confusing, but as long as you get a head start on preparing for them, you’ll be all right. Make sure to find out who your loan provider is, and log into your account to see how much you owe and when you need to start making those payments.

Remember, you’re not alone in this. Good luck and congratulations on graduating!

Cecillia Barr is a graduate of the University of Central Florida. She blogs about her extensive knowledge on student loans in order to help others reduce their debt and live financially independent lives.

College graduation is here, but what to do about my student loans?

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