After College - Your Student Loan Obligations

What about after school? Graduating from college is going to bring you many opportunities and challenges including finding a job, moving, and if necessary, managing your student loans. Most loans provide a grace period after graduation. The reason for this grace period is to allow you time to find a job and settle into post-school life.

Your loan provider will send you a repayment schedule that details the amount owed, when payments are due, and where payments should be sent. Money saving programs and loan consolidations are often offered to students upon graduation as well.

Students are warned to avoid delinquency and default at all costs. Late payments are reported to all credit bureaus and will negatively affect the your ability to get credit cards, buy a car, and even buy a house. A bad credit rating can be very hard to overcome. It can typically take seven years for a bad credit item to be removed from a credit report.

If you miss nine months of payments you are considered in default on your loans. Results of default can include: garnishment of wages, possible legal action by the lender, loss of future eligibility for financial aid, loss of forbearance and deferment options, higher costs due to increased interest, and negative credit reports.

Paying for college is typically the first major debt of your life. But, on average college graduates earn seventy percent more than non-graduates. So, while we recommend you give serious thought to debt management, keep in mind that your student loans are financing your future earning and promotion opportunities.

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