By Bruce McClary
The average 2016 graduate has more than $37,000 in student debt- up 6% from last year and levels of delinquencies and defaults are alarming. For many borrowers, managing student loan repayment is one more financial burden they have to consider on top of housing costs, credit card payments, car loans and more. Many don’t know where to turn for help or are not paying attention to the consequences of not paying back this debt. The National Foundation for Credit Counseling (NFCC) suggests now is a good time to remind graduates of the options for finding a repayment plan that aligns with their overall financial goals; saves them money in the long-term — and where to get help through nonprofit counseling.
Counselors can help borrowers work through the complexity of the numbers and types of student loans and repayment plans. While Income Based Repayment (IBR) plans may be a good option for many to lower the monthly payment, they may not be a good fit for everyone. Student borrowers should be aware of how future income increases may impact how much they repay, or whether IBR plans will help them achieve their long-term financial goals. Some borrowers who are considering IBR plans may wish to speak with a counselor about how their other debts such as credit cards or car loans might impact their student debt repayment decisions.
The consequences of defaulting on a loan are quite serious which is why it’s important for students to know what’s in store for them if they aren’t able to repay their student loan debt as planned. To learn more about student loan repayment options and where to turn to for help, please visit: www.studentloanhelp.org
Graduating This Year? Now’s the Time to Take Control of Your Financial Health
By Bruce McClary