Manage student loans to avoid trouble
COLUMBUS, Ohio (11/27/12)--Consumer borrowing hit a record $2.74 trillion in September, rising $11.4 billion since August. While student loans and auto loans boosted borrowing, consumers cut back on credit card debt (The Columbus Dispatch Nov. 8).
One in five U.S. households has student loan debt, with the biggest burden falling on the young and poor, according to USAToday.com. The economic downturn adds to debt among recent college grads, who often don't find full-time jobs after graduation. The lack of a consistent paycheck goes hand in hand with the inability to pay back loans.
Follow this advice from Credit Abuse Resistance Education (Nov. 14), Alexandria, Va., to help manage student loans:
Know loan details. Know how much you owe on all student loans, as well as the interest rates, monthly payments, and when the loans need to be paid off.
Stay in touch with your lender. Let your lender know of any contact changes such as a new address, e-mail, phone number, or name change as soon as possible.
Know grace periods. After finishing school, you have a grace period before you must start making payments. Grace periods vary from loan to loan. Stay on top of this detail to avoid fees.
Be conscious of loans while in school. If possible, try to pay down student loan debt while you're still in school. You won't have such a big chunk to pay after graduation.
Ask at your credit union for advice about student loans. The professionals there can offer guidance for your situation.
Consider consolidation. Consider consolidating student loans to help manage payments. This could save a lot of money in the long run, but be certain you can handle the combined payment before you consolidate.
For related information, read "Private Student Loans Can Help Fill the Gap" in the Home & Family Finance Resource Center.