Understanding Loans, Part Two: Repayment
If you have borrowed student loans, it is never too early to learn about repayment. Understanding what happens after school may help you feel more prepared when it is time to begin making payments. Many students wait until graduation to learn about repayment. However, knowing the basics while you are in school can be helpful.
Who Do You Repay?
Student loan payments are typically made to a loan servicer or lender. If you have federal student loans, your loan servicer is the company that helps manage your loan account and payments. Students with private loans will usually make payments directly to their lender or the company that services the loan.
Before leaving school, make sure your contact information is up to date. This can help you receive important information about your loans and repayment options.
What Is a Grace Period?
Most student loan lenders offer a grace period. A grace period is a set amount of time after you leave school or drop below half-time enrollment before payments may be due.
Grace periods vary by loan type and lender. Review your loan information carefully so you understand what applies to your situation.
How Do You Set Up Payments?
When repayment begins, you will usually receive instructions from your loan servicer or lender.
Borrowers should create an online account to:
- View loan balances
- Review payment information
- Make payments and set up auto-pay functions
- Update contact information
What If You Have Questions?
If you are unsure about your loans, do not ignore them. Contact your loan servicer or lender as soon as possible. Asking questions early may help you better understand your repayment responsibilities and available options.
If you are having trouble making payments, contact your service or lender right away. Depending on your situation, deferment, forbearance, disability discharge, or other repayment assistance options may be available.
The Bottom Line
Preparing for repayment starts before your first payment is due. Knowing who manages your loans, understanding your grace period, and learning how to make payments may help you feel more confident when repayment begins.
