The Do's and Don'ts of Student Loan Repayment
Monday, December 01, 2014
With recent attention on student loan debt, FSB turned to a local expert on the student loan market for tips on managing student loan debt.
“Recently, there has been an increase of Internet ads promoting student loan forgiveness or a dramatic reduction in student loan rates or payments,” said Steve McCullough, president and CEO of Iowa Student Loan, a nonprofit organization dedicated to helping students and families get resources they need to succeed financially in college and beyond. “Frankly, we have to remind individuals that if it sounds too good to be true, it probably is. However, legitimate options are available and it is important that students and families know where to find reliable information.”
McCullough offers these answers to frequently asked questions about student loan management:
Where should people get information on repaying student loans?
If you have federal student loans through the William D. Ford Federal Direct Loan Program (Direct Loan), we can’t overstate the value of going directly to the main Federal Student Aid website, https://studentloans.gov. This site provides federal loan history behind a secure login and allows you to work directly with the customer service entity for each of your loans.
Find your Direct Loan servicer at https://studentloans.gov/myDirectLoan/additionalInformation.action. You can then change to a repayment plan more suitable to your current circumstances, review options for delaying payment, if needed, and confirm your payment method — including convenient automatic payments that may result in an interest rate reduction.
If you have other federal loans or private student loans, contact your servicer directly for free assistance before paying an outside company. Your credit agreement or promissory note should provide your private loan servicer’s contact information, and you may visit the National Student Loan Data System at www.nslds.ed.gov for complete information about your federal loans.
What should student loan customers avoid?
Avoid scams. A resource to help identify scams is available at www.IowaStudentLoan.org. Iowa Attorney General Tom Miller cautions against companies that charge a fee to “rescue” or “consolidate” student loans.
What can students and families do to reduce future debt before they borrow?
Iowa Student Loan offers two unique and free tools online at www.IowaStudentLoan.org to help students avoid borrowing more than they can reasonably expect to pay back once they’ve left college and started earning an income.
Student Loan Game Plan offers a customized action plan based on the student’s chosen major, recommended maximum borrowing levels and expected living expenses after graduation.
Explore actual jobs and incomes attained by graduates of specific majors with the ROCI Reality Check. This tool provides projected job availability and other information to help students make an informed decision about which major will help them earn enough to repay their student loan debt while living their desired lifestyle after graduation.
About Iowa Student Loan
Since 1981, Iowa Student Loan, a private, nonprofit organization, has helped Iowa students and families obtain the resources necessary to succeed in postsecondary education. Iowa Student Loan has helped more than 375,000 students pay for college. The organization, based in West Des Moines, Iowa, also provides an array of borrower benefits, financial literacy tools and community reinvestment programs, including support for free college planning services for students and their families. For more information about Iowa Student Loan, visit www.studentloan.org.