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Managing student loan debt

recently read an article on CNN stating that today’s college grad will earn their degree with an average of $35,000 in debt.

That number hit home with me, and it got me thinking… 

Mostly about my own experience and fear when dealing with college debt.

A potential pitfall of financing your education through lenders is the uncertainty many people have with regard to the terms of their loans. It’s too easy to just sign on the dotted line of the lending agreement without ever reading the fine print, which dictates repayment terms and interest rates. Here are a few ways to take control of your debt.

· Take the time to fully understand the type of loan you are receiving as well as when repayment begins and how much your monthly payments will be.  Each type of loan has its own set of regulations. 

· Familiarize yourself with the loan repayment schedule.  If you haven’t secured steady employment when your first payment comes due, contact your lender to see if payments can be deferred a little longer. Deferment allows you to postpone payments without interest accrual. However, forbearance is much different and although payments are postponed, you are still responsible for the additional interest which will be due monthly. If you choose to not pay your interest during forbearance, it will be applied to the principal of your loan.

· If you find yourself in hardship, many lenders will allow you to negotiate payment options. I don’t recommend this route unless absolutely necessary since repaying the loan over a longer period of time will lower your monthly payments but result in paying more interest over the life of the loan.  

· Don’t ignore problems. If you are falling behind on your loan payments, take action right away. Doing something is better than doing nothing at all. An inability to repay your student loan debt can cause problems later in life, so don’t allow the problem to snowball before you do anything about it.