| Student loan paperwork a potential
nightmare |
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Good records are especially important because some
lenders sell student loans to other institutions, and while they're
required to notify you of such transfers, the lender may be unable
to track you down if you change your address often enough. At the
end of the day, the burden of repayment is yours, whether you receive
monthly bills or not.
Sources of help
If you haven't kept paperwork from your lenders, or you just wish
to double-check your student loan obligations, there are a few good
sources that can help.
National
Student Clearinghouse, a nonprofit group in Herndon, Va., offers
a free online tool used by many financial aid counselors to help
students track their loans and obtain lender contact information.
Its "LoanLocator" only requires a Social Security number
and date of birth.
Some 350 colleges and universities, including many
larger state schools, also subscribe to EdFund.org, which provides
to students a free, single-page snapshot of all their federal Direct,
Stafford, Perkins and consolidation loans. The student loan debt
summary does not include federal PLUS, institutional or private
loans.
"Schools use our summary to let students know
how much debt they've accumulated and what their estimated monthly
payments will be," says Anita Kermes, manager of EdFund's Default
Prevention Initiative unit. "They can send it up to four times
a year to students, and borrowers can also log on to our Web site
and query monthly."
You can get the same information by doing the digging
yourself. The online National
Student Loan Data System, offered through the U.S. Department
of Education, provides a central database for federal student aid.
The program receives data from schools, guaranty agencies, the Direct
Loan program, the Pell Grant program and other government programs
on all federal aid, including Stafford, Perkins, Direct and consolidation
loans.
Facing the first payment
The biggest challenge for many borrowers, of course, is coming up
with the cash.
As their grace period comes to an end, some recent
grads find the monthly payments they agreed to four years ago are
too much to handle -- especially if they remain unemployed. In those
cases, Kermes says borrowers should contact their lenders immediately
to arrange a payment schedule they can afford.
"A lot of students start getting their monthly
student loan bills and it's like, 'Oh, my gosh, it's a minimum monthly
payment of $400. How am I going to pay that?'" she says. "But
it's not like a credit card bill. You have some options. You should
call your lender and explore those repayment options."
Bank- or government-issued federal student loans,
such as the Stafford, offer a variety of payment plans to meet the
needs of borrowers. They include income-contingent or income-sensitive
payments based on the borrower's income and total debt, graduated
payments that slowly rise with your projected income, and an extended-pay
plan where you stretch the term to lower the payments. Students
can switch back and forth to suit their financial needs, sayes Kermes,
and no prepayment penalties exist. The same repayment options and
flexibility are available if you choose to consolidate
your student loans.
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