No guide to student loans would be complete without a section on repayment.
It should go without saying, but “Whatever you take out, you’ll have to repay,” Channel says. It’s important to understand repayment terms in advance, particularly for private loans. “You may have to start paying loans sooner rather than later,” he adds.
Private loans may require payments to begin immediately while you are still in school, but most federal loans come with a six-month grace period. That means payments won’t begin until six months until after you graduate or drop below half-time enrollment status.
If you have Direct Unsubsidized Loans, you won’t have to make payments in college, but interest will accrue on your balance. It can be a good idea to at least pay those interest charges to avoid having your balance grow while you are in school.
As you consider your career options after graduation, keep in mind that certain jobs could help wipe out your debt.
“There are a number of people who could qualify for loan forgiveness,” Lachs says.
Currently, there are two main student loan forgiveness programs:
- Public Service Loan Forgiveness: Available to those with Direct Loans who work for the government or a not-for-profit organization and make 120 qualifying monthly payments.
- Teacher Loan Forgiveness: Up to $17,500 in Direct Loans or loans from the Federal Family Education Loan Program may be forgiven for teachers who work for five complete and consecutive academic years in a low-income school.
Note that loan forgiveness programs and repayment plans may change in the future. There has been a great deal of discussion about reforming the current system, and President Joe Biden announced in August 2022 that the government would forgive up to $20,000 in existing student loans for eligible borrowers.
However, to be eligible for any loan forgiveness program, you must have federal loans. Private loans will not qualify.
Student loans are necessary for many to attain a college education, which may lead to higher pay and better employment opportunities. That doesn’t mean, though, that you should accept any and all loan offers that come your way. Carefully review your financial needs, the type of loans available and how much they will cost in interest charges before borrowing money.
For more information about understanding student loans and paying for college, visit the Office of Financial Aid and Scholarships at the University of Nevada, Reno.