Honoring your student loan commitments is a promise you have to keep
Paying your student loans will help you learn to manage your finances and to establish a positive, solid credit score—all of which will help you fulfill your own individual promise as well.
Take an active role in your student loans
When you took out your loans, you made a commitment—a commitment that will continue until you submit your last payment. Part of that commitment is taking active responsibility for managing your loans.
Don’t wait for your lender to contact you when you have a question or concern.
If you don’t understand something about your loans, ask your lender. If you just graduated and aren’t sure when you need to start paying, find out. Call your lender and ask for a payment schedule.
Waiting to hear from your lender can cost you money. Your lender may not contact you until they see that something is wrong, like when a letter comes back as “return to sender” or a payment is missed. By the time they finally reach you, you may be facing late fees.
To successfully manage your student loans you have to master these basics:
- Know the lender and their contact information for each of your loans
- Keep track of your payment due dates and the amount due
- Know which repayment plan you’re on
- Talk to your lender when you have questions or concerns
- Keep your lender informed about changes in your address, email and phone numbers
If you don’t know who your lender is, go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information.
Why making loan payments is important
If you’re just graduating from college, student loans are probably your largest single debt. Making monthly, on-time payments helps you build a strong credit rating. Why is that important?
Your credit rating determines how much you have to pay to borrow money, or whether anyone will loan you money at all. The riskier you look, the more a bank or an auto finance company may charge you to borrow money.
If you miss a lot of payments, or default on a student loan, your credit rating will suffer. A bad credit score will do more than drive up your credit card rates. Bad credit can make it hard to:
- Buy a car
- Buy a house
- Even get a job
Use your student loans to build your credit score by repaying them on time, every month.
You have to pay back all of your students loans
It may sound obvious, but all student loans, regardless of what type they are, are not grants or scholarships. They are borrowed funds and you must pay them back even if you didn’t finish school, did not complete your program within a standard timeframe, were dissatisfied with your education or can’t find a job in your chosen field.
If you’re worried about how you’re going to pay your loans back, there are many options for you to explore.
