Student Loan Debt Repayment And Borrowing Practices That Lower College Debt–Avoiding Problems When Loans Are Necessary

Student loan debt repayment and simple borrowing practices that students have implemented may offer lower costs on college debt or help borrowers avoid problems that may arise when a student loan or multiple loans is necessary to help meet their college costs. Understandably, student debt is one of the major problems that many graduates face, particularly when they have acquired a sizable amount of college loans from either federal or private sources, and not only is choosing the correct student loan helpful and necessary for lowering college debt costs, but the way that students borrow and repay these loans will also be a factor in how much they eventually will have to pay on this particular form of debt.

Obviously, students who can pay for their college without borrowing will be in a better position financially after they graduate as this type of debt usually has a grace period where students do not have to begin making repayments, but after that period has ended, many students are often overwhelmed with the total monthly costs on either one or many student loans. An article on Bankrate.com stated that, “…it goes without saying that you should avoid loans if at all possible. Taking out a single loan can become a contagious habit. Some students finance their entire college educations using loans. The amount can total as much as a home mortgage and take 30 years or more to pay off.”

For this reason, among many others, students need to first seek out as much funds from grants and scholarships as they can possibly find, making sure that they look for specific financial aid options beyond generic applications like filling out a FAFSA form that will also factor in their financial need, academic merit, or even the particular college degree they are pursuing. Exhausting these options through online research, high school guidance counselors, or even college financial aid officers are the first priority that responsible students pursue when seeking college financing, as some individuals can bypass the need for loans altogether.

Yet, when student loans are necessary, there are repayment practices that can be implemented and initial borrowing methods that some students may use to lower their overall costs. When it comes to borrowing, obviously, students who can keep their debt at a minimum will be in a more advantageous position after graduation, so many counselors often advise students to only borrow as much as they need to cover tuition costs. Many individuals will borrow enough money from a federal or private student loan to cover tuition and fees, but also, books, food, and even helped pay for room and board in some cases. Excessive borrowing will, understandably, lead to higher debt after school and even if a low interest rate is offered on these loans, it could still result in a longer repayment timeframe and higher costs that must be met.

However, students who graduate with multiple student loans often feel that a consolidation plan is their best bet as well, as this can lower the minimum monthly payment that may be required on debt obligations, since multiple loans could lead to a higher overall monthly payment cost. In these cases, students must review their student loan situation due to the fact that some loans which may have a small principle may be easily erased and funds could be used to combat higher student loan principal amounts, which may lead to a shorter overall repayment timeframe and more affordability. Yet, if students run the risk of missing payments on their student loan debt, consolidation loans like those from the federal government can be helpful and even go further to offer income-based repayment plans or student loan forgiveness after a set period of time.

Students who can repay their debt as quickly as possible through budgeting and proper repayment methods, rather than simply meeting minimum requirements, are going to find themselves in a better position when the overall costs are calculated, but if financial distress is a problem, contacting one’s lenders or the federal Direct Loans program, for those who only have federal student loan debts, could also present some solutions so that missed payments will not be a problem and a student can work on getting in a better financial position so that they can more aggressively attack these repayment requirements, erase their debt faster, and save more over the long run.