As you get closer to graduation, student loan repayment is likely one of the many things beginning to weigh on your mind. Happily, with most all student loans, you still have time to plan. Loans borrowed through the federal FFEL or direct Stafford programs allow the borrower a six month grace period after graduation before repayment begins. Other loans such as a Federal Perkins loan, or an alternative loan you may have received outside of any federal or state program, may have different lengths of time for which they are deferred after graduation. It’s best to speak to your lender or financial aid adviser to get all the details on these. The grace periods allowed to student borrowers after graduation allow you to take some time to secure your income, and put your after-college financial life in order. Rather than continuing to put repayment on the back burner, this is also an opportunity for you to make sure you will be able to make those payments when they come due.
Today’s date is April 28th. So if you worked last year and haven’t filed a tax return, you’re late. That is reason number one. If your a college student investigating how to pay for school, you also have two more.
2) You (and possibly your parents) need to complete your tax return before your FAFSA application can be filled out completely and accurately. Many of you may have chosen the option of estimating income numbers, when filling your aid application out. Your school may still ask for copies of your return(s) though for verification.
3) Tax rebates start going out today! You’ve probably heard or read this in the news already. Most of us this year are going to be getting a $600 to $1,200 rebate back from the federal government on top of whatever tax return we are owed. But you have to file a 2007 return to get it. Though you may already have plenty of things to earmark those dollars for, now is a great time to have a bit of free cash at your disposal for things like school and scholarship application fees, needed supplies for dorm life, or gas and food money for college visits.
When students graduate with a bachelor’s degree sometimes they find it difficult to pay those loans back. Graduate or professional level students often have an even higher student loan bill looming in the distance. So it’s not surprising that graduates would look for loan forgiveness programs.
Traditionally there have been teacher loan forgiveness programs. That is graduates who took out certain types of loans can get a part of their loan forgiven (so that they don’t have to pay it back) if they work as a K-12 teacher for a certain number of years. Individual school districts with teacher shortages or with a higher risk population may also have teacher loan forgiveness programs.
Loan forgiveness for doctors, nurses and others in medical professions can also be found. This week Inside Higher Ed presents an article on Loan Forgiveness, Beyond Law and Medicine. Now it looks like loan forgiveness programs are expanding into other areas besides these traditional ones.
If you are considering student loans and have bad credit, or no credit, it is important to remember that you do have options. First, make sure you have submitted a FAFSA application, and applied for all the grants and scholarships you can find, to minimize the amount you will need to borrow as much as possible. After that, the Stafford student loans offered through by the federal government do not require a credit check. These loans are guaranteed by agencies working with the government and lender banks. So unless you have recently declared bankruptcy, chances are you will not be denied these loans based on your financial history.
Where creditworthiness really comes in to play is when applying for additional loans on top of any Stafford loans you may be offered. Parent PLUS loans, also offered through a federal program, require sufficient credit history on the part of the student’s parent who applies for the loan. Students who apply for alternative student loans with banks or other independent institutions will also need good credit to qualify. Different lenders will have their own terms and conditions for the loans they offer, and many are willing to accept cosigners for students whose credit isn’t up to par. Other loans offered through federal, state, or institutional programs may or may not include a favorable credit score as a requirement. So, be sure to speak to your financial aid adviser about these, and get the facts about credit requirements for any loan before you decide whether or not to apply.
College students - now is the perfect time to find out if you can get an internship for summer. Many employers - especially non profit organizations - use interns. Sometimes you get paid for the internship and other times your benefit is just work experience and a resume builder. If you don’t want an internship for summertime you might consider it for next spring or fall. Also, don’t forget to ask your college professors if you can get credit for your internship. Sometimes you can get 1-3 hours worth of credit for your internship. Normally that is if it relates to your major in some way.