Loan Repayment: What it Means to Your Financial Future

The decision to acquire any form of debt is a serious obligation. The impact of that obligation may be intensified by the sometimes considerable financial cost of obtaining a graduate or professional degree. It is helpful to anticipate your present and future funding needs, and monitor your level of debt at any given time. The information presented here will help you keep track of your education loan obligations (both undergraduate and graduate) and assist you in estimating your repayment costs.

What Will it Cost to Repay Your Education Loan Debt?

Your monthly student loan payment is based on the loan amount, the interest rate, the fees, and the repayment period. This information can be obtained either from your copy of the promissory note that you signed as part of the loan application process, or from your loan disclosure statement. If you have questions about this information, contact your school's financial aid office or your loan servicer.

Estimating Your Monthly Payments for Education Loans

Our online loan repayment calculator estimates your monthly payments, total payments (principle plus interest) for the life of the loan, and total interest paid over the life of the loan. Have the following information on hand when using the calculators:

Subsidized Loans

• Amount Borrowed
• Years to Repay Loan
• Interest Rate

Unsubsidized Loans

• Amount Borrowed
• Years to Repay Loan
• Interest Rate
• Month and Year Loan was Dispursed
• Expected Month and Year of Graduation
• Number of Months of Deferment or Grace Period after Graduation

What Loan Repayment Options May Be Available?

According to federal law, some types of federal loans must offer graduated or income-sensitive repayment options. Under these plans, you may be able to make lower monthly loan payments initially, when your income may be limited. Payments are gradually increased, over a period of years, as your income rises. Check with your lender to see whether your federal loans qualify for these repayment options. Another alternative you may wish to consider is consolidation of your federal loans. This option allows you to consolidate your federal loans into a single new loan with an extended repayment period, which can substantially reduce your monthly payments. However, by extending your repayment period, you will incur additional interest charges. Your lender, or the financial aid administrator at your school, can provide additional information on this subject to help you determine whether consolidation would be in your best interest.

Consolidation options also may be available to refinance your private education loans. Consult your lender(s).

Tips on Repaying Your Education Loans Successfully

• Send your education loan payments when due each month, in the full amount, regardless of whether or not you receive a bill.
• Communicate with your lenders, loan holders, and/or servicers. If you have a change of name or address, questions about repayment, a concern about a billing statement, a problem making a payment, or want information about deferments or any other matters related to repayment of your loans, the key is--communication!
• Review closely all correspondence you receive from your lenders, loan holders, and/or servicers, and respond promptly if requested (or required) to do so. Carefully review any notification you receive about your loans being sold to another loan holder or secondary market. You will be notified of any changes related to your loans, such as a new address to which you must send payments, new telephone numbers for any inquiries, or new procedures for requesting deferments.

Keeping Track of Your Education Loan Obligations

During school and after graduation, you are responsible for repaying your education loans. Thus, it is essential that you keep an accurate record of each loan you have acquired. You need to know your lender, your interest rate, the total amount borrowed, and the amount of your payment. It is also helpful to know who the servicer is for your loan. All of this information will be required if you should decide to apply for a consolidation loan at some point in the future.