It’s been hard to come to terms with, but I need to face the facts: I’m not in college anymore. In fact, this January marks two years since I started repaying my student loans. I know, not the most exciting thing in the world, but important. So while I don’t claim to be a student loan expert, I have learned a lot of lessons along the way, mostly through trial and error. In hopes that you won’t make the same mistakes I did, here are some things I wish I had known before I started repaying my student loans:
Let’s be real. When you take out student loans to help pay for college, it’s easy to forget that that money will eventually have to be paid back … with interest. The money just doesn’t seem real when you’re in college, and I didn’t do a good job of keeping track of what I was borrowing and how it was building up. When it was time to start repaying my loans, I was quite overwhelmed. I had different types of loans and different interest rates. When I did eventually see my total loan balance, I was pretty shocked.
You can avoid this problem. Had I known there was a super easy way to keep track of how much you’ve borrowed in federal student loans, I would have been much better off. Just go to nslds.ed.gov, select “Financial Aid Review,” log in, and you can view all of your federal student loans in one place! How did I miss that?
- I should have made interest payments while I was still in school.
If you’re anything like me, you probably consumed your fair share of instant noodles while trying to survive on a college student’s budget. Trust me, I get it. But one thing I really regret when it comes to my student loans is not paying interest while I was in school or during my grace period. Like I said, I was far from rich, but when I was in college, I did have a work-study job and waited tables on the side. I probably could have spared a few dollars each month to pay down some student loan interest. Remember, student loans are borrowed money that you have to repay with interest and more importantly, that interest may capitalize, or be added to your total balance. My advice: Even though you don’t have to, do yourself a favor and consider paying at least some of your student loan interest while you’re in school. It will save you money in the long run.
3. I should have kept my loan servicer in the loop
If you’ve recently graduated and haven’t heard from your loan servicer, make sure you check that your loan servicer has up-to-date contact info for you. When I graduated and moved into my first big-girl apartment, I forgot to change my address with my loan servicer. I found out that all of my student loan correspondence was going to my mom’s address. I hadn’t even thought to update my loan servicer with my new contact information. Don’t make the same mistake I did. Keep your servicer informed of address, e-mail, and phone changes.
- I should have figured out what my monthly loan payments were going to be BEFORE I went into repayment.
By the time my grace period was over, I had a decent idea of how much I had borrowed in total, but I had no idea what my monthly payments would be. I thought I was fine. I had started my new job and been paying rent and other bills for about six months. Then my grace period ended, and I got my first bill from my loan servicer. It was definitely an expense I hadn’t fully taken into account.
Don’t make the same mistake. Luckily for you, Federal Student Aid recently launched a repayment estimator that allows you to pull your federal student loan information in order to compare your monthly payments under different repayment plans side by side. That way, you know what to expect and can budget accordingly … unlike me.
I’ll be the first to admit that this whole process can seem a little overwhelming, especially when you’re new at it. But just remember, your loan servicer is there to help you. If you have questions or need advice, don’t hesitate to contact them.
Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.