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Student Loan Repayment Article

One obvious disadvantage with student loans as compared to scholarships is that they must be paid back. Depending on the type of loan you have and from where you get it, there will be different rules about when you pay, how much you pay and how often you pay. Most student loans don't necessitate payback until you've graduated, but leave the option for at least partial payment open before graduation if the student chooses, with the reward of lessened interest if the student begins to pay before graduation.

With many student loans there is a 6 month grace period between the time that the student graduates and the time where he or she must start repaying loans. Often if a student feels that he or she may not be able to afford loan payment at the time of graduation, the best course of action is to get a job during the time between graduation and loan repayment. Another idea is to sell furniture, clothing, etc. that one may have accumulated in college to go toward loan repayment.

One part of student loans which catches many offguard is the inclusion of interest. The Federal Student Aid website offers this easy calculation in order to calculate your interest.

Number of days since last payment x Principal Balance Outstanding x Interest Rate Factor

= Amount of Interest

If, for some reason, one is unable to pay his or her student loan according to the stipulated time and amount of payment, there is a risk of default. This technically means a failure to perform a legal duty but in the case of student loan repayment it means that the holder of the loan assumes that the receiver did not intend to pay. According to the Federal Student Aid Office, if default occurs, steps may include that the Department of Treasury may legally offset the student's refunds or any other payments, that the Department may legally force you to pay the loans and that your credit score will suffer.

In order to avoid this, many people who fear that they may be unable to pay back their loans according to formerly agreed
upon stipulations look toward loan consolidation. This means paying for one loan instead of several, at a fixed rate, over time.
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