Students Need to Prepare for College Loans Early
San Francisco, CA (CollegetoCareers.com) – College is one of the most daunting rights of passage in a young person’s life. In addition to learning how to survive on your own for the first time away from your protective parents, you have to deal with how to pay for your schooling, your textbooks, your room and board, travel to and from home and school and any other costs that go along with a college education.
Thankfully, there are many ways to prepare yourself early for the eventual school loan payments you will be making for years and even decades to come after you graduate with your degree. While many students are lucky enough to receive free federal grant money that they will not have to pay back after they graduate, most students will receive financial aid in the form of loans. Create a separate savings account that is intended solely to be used for your future college loan payments as early as possible. The less money you have to pay after you graduate, the better.
The Downriver News Herald reports that one of the best ways for parents to prepare their children for these future monthly payments is by creating a 529-college savings plan. These savings plans are intended specifically for college funding. Anything accumulated in the account will be tax free if it is used to pay for qualifying higher education expenses such as tuition, books and room and board.
Luckily for many students, most loans come with a grace period after a student graduates that allows them to either become situated or find a job before they are required to start making loan payments. The length of the grace period changes for undergraduates and graduate students and the different types of student loans.
Federal Stafford loans (Direct Loan Program or Federal Family Education Loan) have a sixth-month grace period, while Federal Perkins Loans have a nine-month period. Graduate students are lucky enough to have options of deferment based on economic hardship or military service.
There are also PLUS loans, which operate completely different from all other types. Repaying a PLUS loan begins on the same day the federal government disburses the loan, and students are expected to make the first payment within 60 days.
For more information on paying for college, visit our College Scholarships page.