AHEAD OF THE GAME
Office of Scholarships & Financial Aid
Top Ten Student Loan Tips for Recent College Graduates
1. Know Your Loans: Access information about all of your federal student loans at www.nslds.ed.gov/nslds_SA/.
2. Know Your Grace Period: Different loans have different grace periods (how long you can wait after leaving school
before you have to make your first payment). For Perkins loans the grace period is nine months; for Stafford and most
other federal loans it's six months.
In this issue: 3. Pick the Right Repayment Option: When your federal loans come due, your loan payments will automatically be
based on a standard 10-year repayment plan. If the standard payment is going to be hard for you to cover, there are other
• It’s Almost options that can help you manage your debt.
Time. . . to
repay your 4. Stay in Touch with Your Lender: Whenever you move or change your phone number, make sure to tell your lender
student loans right away. If your lender needs to contact you and your information isn't current, it can end up costing you a bundle. Open
and read every piece of mail you receive about your student loans. If you're getting unwanted calls from your lender or a
• Federal Direct collection agency, don't stick your head in the sand! Talk to them about the issue: lenders are supposed to work with
Consolidation borrowers to resolve problems. Ignoring bills or serious problems can lead to default.
Options 5. Remember that You Have Options: If you're having trouble making payments, don't panic. Whether it's due to
unemployment, health problems, or going back to school, there are legitimate ways to postpone your federal loan
• Consequences payments, such as deferments and forbearance.
on Federal 6. Stay out of Trouble! Ignoring your student loans has serious consequences that can last a lifetime. Not paying can
Loans lead to delinquency and default. For federal loans, default kicks in after nine months of non-payment. When you default,
your total loan balance becomes due, your credit score is ruined, the total amount you owe increases dramatically, and the
• Important government can garnish your wages and seize your tax refunds. Talk to your lender if you're in danger of default. You can
also find useful information at studentloanborrowerassistance.org.
Students with 7. Lower Your Principal if You Can: When you make a loan payment, it covers any late fees first, then interest, and
Federal Loans finally the principal. If you can afford to pay more than your required monthly payment, you can lower your principal,
which will reduce the amount of interest you have to pay. Include a written request to your lender to make sure that the
extra amount is applied to your principal, otherwise they will just apply it to future payments. Keep copies for your
records and check back to be sure the overpayment was applied correctly.
8. Pay Off the Most Expensive Loans First: If you're considering paying off one or more of your loans ahead of
schedule, or trying to reduce the principal, start with the one that has the highest interest rate. If you have
private loans in addition to federal loans, start with your private loans, since they almost always have higher interest
rates and lack the flexible repayment options and other protections of federal loans.
9. Think About Consolidation: A consolidation loan combines multiple loans into one for a single monthly payment and
one fixed interest rate. This calculator can help you figure out what your interest rate would be if you were to consolidate.
If consolidation is right for you, check out Direct Consolidation Loans from the Department of Education .
10. Loan Forgiveness: There are various programs that will forgive all or some of your federal student loans if you
work in certain fields. Public Service Loan Forgiveness is a new federal program that forgives any student debt remaining
after 10 years of qualifying payments for people in government, nonprofit, and other public service jobs. Find out more at
www.IBRinfo.org. There are other loan forgiveness options available for teachers, nurses, AmeriCorps and PeaceCorps
volunteers, and other professions. See a comprehensive list of loan forgiveness programs by state.
This information brought to you by:
AHEAD OF THE GAME Page 2
It’s Almost Time. . .to Repay Your Student Loans
All students need to complete a Direct Loan "Exit Counseling Session" during their final semester at Oklahoma State
University. The purpose of this session is to make sure that students understand their rights and responsibilities as
they enter repayment and choose a repayment plan. Exit counseling can be completed online at www.nslds.ed.gov.
When do I begin repayment? You have a 6 month “grace period” after graduating before loan repayment
begins. During this time, you may reconsider any changes you need to make to your loan repayment plan, to best
suit your financial needs. Contact the Direct Loan servicer for options on changing your repayment plan or for any
other repayment questions you might have.
Do you have an accurate record of all your federal student loans? It's important to keep track of the
lender, balance, and repayment status for each of your student loans. Visit www.nslds.ed.gov for more information.
Once you log in there you can find out your total loan amounts, lender(s), and the repayment status of your federal
loans. If some of your loans are not listed, they are probably private (non-federal) loans. For those, try to find the
paperwork that you signed; contact your school if you cannot locate any records.
Resource: Repaying Your Student Loans: A Quick Reference Guide
Federal Direct Consolidation Options
A Direct Consolidation Loan allows a borrower to consolidate (combine) multiple federal student loans into one loan.
The result is a single monthly payment instead of multiple monthly payments. Make sure to carefully consider
whether loan consolidation is the best option for you.
While loan consolidation can simplify loan repayment and lower your monthly payment, it also can significantly
C increase the total cost of repaying your loans.
O You also should take into account the impact of losing any borrower benefits offered under repayment plans for the
original loans. Borrower benefits from your original loan, which may include interest rate discounts, principal
N rebates, or some loan cancellation benefits, can significantly reduce the cost of repaying your loans.
Here are some factors you should consider when deciding if consolidation is right for you.
S Are your monthly payments manageable? If you have trouble meeting your monthly payments, have
O exhausted your deferment and forbearance options, and/or want to avoid default, a Direct Consolidation Loan may
help you. Use Direct Loans’ online calculator to find out what your monthly payments would be under each of our
L repayment plans.
Too many monthly payments driving you crazy? If you send payments to more than one lender every
I month, and want the convenience of a single monthly payment, consolidation may be right for you. With a Direct
Consolidation Loan, you will have a single lender - the U.S. Department of Education - and a single monthly payment.
D What are the interest rates on your loans? If you have variable interest rates on your Federal education
loans, you may want to consolidate. The interest rate for a Direct Consolidation Loan is fixed for the life of the
A Direct Consolidation Loan. The rate is based on the weighted average interest rate of the loans being consolidated,
rounded to the next nearest higher one-eighth of one percent and can not exceed 8.25 percent. Use Direct Loans’
T online calculator to find out what your weighted average interest rate would be if you consolidate.
E How much are you willing to pay over the long term? Like a home mortgage or a car loan, extending the
years of repayment increases the total amount you have to repay.
? How many payments do you have left on your loans? If you are close to paying off your student loans, it
may not be worth the effort to consolidate or extend your payments.
For more information: http://loanconsolidation.ed.gov/index.html
AHEAD OF THE GAME Page 3
Consequences of Defaulting on Federal Loans
Definition of Default
Default is a legal term which describes a borrower's failure to repay a loan according to the terms agreed
to when he/she signed a promissory note. For the Federal Direct Student Loan Program, default occurs
when a borrower fails to make a payment for 270 days under the normal monthly repayment plan.
Consequences of Default
The consequences of default are severe. Oklahoma State University, the lender or agency that holds your
loan, the state and the federal government will normally all take legal action to recover the money you
• Notifying national credit bureaus of your default. This may affect your credit rating for as long as
seven years. For example, you might find it difficult to borrow money from a bank to buy a car; Default!
• More on why your credit rating matters
• The Internal Revenue Service can withhold your U.S. Individual Tax Refund and apply it to the
amount you owe;
• The agency holding your loan might ask your employer to deduct payments from your paycheck;
• You generally will be liable for loan collection costs;
• If you return to school, you generally will not be eligible for additional federal federal aid .
Important Websites for Students with Federal Loans
• National Student Loan Data System (NSLDS) for Students www.nslds.ed.gov/nslds_SA/
• Direct Loan Servicing www.myedaccount.com
• Direct Consolidation Loans http://loanconsolidation.ed.gov
• Repayment Information http://studentaid.ed.gov/PORTALSWebApp/students/English/repaying.jsp
• StudentLoans.gov www.StudentlLoans.gov
• Defaulted Student Loans www2.ed.gov/offices/OSFAP/DCS/
Oklahoma State University
Office of Scholarships & Financial Aid
119 Student Union
Stillwater, OK 74078
Phone: (405) 744-6604
Fax: (405) 744-6438