How to Help Your Students Repay Their Loans
As the parent of a college student who has borrowed student loans, you can help your student understand how to successfully manage repayment. Here are some tips you can share to help your student when the payments begin.
Complete exit counseling.
Almost all schools require students to complete student loan exit counseling when they are no longer enrolled at least half-time. The counseling helps students understand their rights and responsibilities as a student loan borrower, the different repayment plans, and what options are available if they can't make their payments. Encourage them to complete it so they can understand how federal student loans are different from other types of loans.
Understand that the loans are real.
When your student is in college, receiving their student loan can seem like free money. But it all has to be repaid, with interest. Make sure your student understands that their loans should be taken seriously—and they should borrow only what they need for education expenses.
Know who and how much they owe.
It's likely that your student has more than one loan. They can keep track of who they owe and how much they owe in StudentAid.gov. StudentAid.gov tracks all outstanding federal student loans until they are paid in full. Students can see a listing of each of their loans, the total amount of each type of loan, and the total for all of their loans. They can also see their grants, even though they don't have to pay those back.
If they have non-federal loans (i.e., private loans), they can find a free listing of all of their loans on their credit report at annualcreditreport.com.
Keep track of the details.
When students graduate or drop below half-time enrollment, their student loans enter into a grace period. Depending on which type of loan they have, their grace period varies. Students should know how long their grace period is, when repayment begins, and what their payment due date is. They can keep track of these loan details by opening and reading all of their correspondence from their student loan servicers and asking questions if they don't understand something. This will help them stay on top of their loans.
Sign up for automatic payments.
Another way students can stay on top of their loans is to sign up for automatic payments. Making automatic payments helps students better manage their finances and is free and easy-to-use. Students with Great Lakes loans can sign up for Auto Pay, our automatic payment service, at any time—even while they're still in school. Once students are in repayment, they may receive an interest rate reduction for making automatic student loan payments. For example, Direct loans receive a .25 percent interest rate reduction when Auto Pay is used.
Know the options.
One of the most important things your student should understand is that they have repayment options. They have their choice of a number of different repayment plans, all with different terms, such as income-based or graduated repayment plans. If they have trouble making their payments, there are additional options available, such as postponements through deferment and forbearance. Once your student understands all of their options, they can choose the plan that best fits their situation.
Don't pay a fee for student loan help that's free.
At times, it may feel like student loans are an overwhelming burden. Remember, we're here to serve you. Stay in touch. Ask questions. Lean on us for help and expertise. There are companies that may ask you to pay for student loan services that we offer for free. Save your money! You should never have to pay for student loan advice or services.
What Can You Do Today?
Encourage your student to log into mygreatlakes.org. They can begin managing their loans by viewing their account summary, account details, and repayment plan options.