More Money Tips from College Foundation of NC
Step 2: Select a repayment planThere
are lots of repayment options—Standard, Graduated, Income-Based,
Income-Contingent, and Extended. To find the plan that best fits your
situation, select a plan for each of your lenders/servicers and
calculate the monthly payments.1. List all of your lenders; list
all of your loans with each lender by loan type. (If you have multiple
federal loans it may be helpful to have them on the same repayment
plan.)2. Use a calculator to run the numbers on each repayment plan for each of your loans.3.
Look at the monthly payments. Which plan can you afford? Remember, the
lower your payments now, the more interest you'll pay in the long run.4.
Talk to your lenders or servicers. If your current plan isn't a good
fit, ask how to switch to a plan that works better for your budget.Step 3: Stay on top of your loansBorrowers
can stay on top of their loans by keeping track of who and how much
they owe. Keep in touch with your lenders or servicers and let them know
if your name, address, or telephone number changes, so they can stay in
touch. Borrowers should also reconsider their repayment plan if their
payment is too high. Talk to your lenders or servicers if you're having
trouble making payments. You may qualify for a deferment or forbearance.
There are many options available if your payment plans or due dates
aren't working for you.
What Borrowers Can Do If They DefaultIf borrowers default on their loans, they still have options.Loan Rehabilitation:
Borrowers can rehabilitate their loan by making nine full payments
within 20 days of their due dates over a 10-month period. Payments
secured through wage garnishment do not count. Advantages of
rehabilitation include:· Loans will no longer be considered in default status.· The default status reported to the credit bureau will be deleted.· Borrowers
will be eligible for the same benefits available on the loans before
the loans defaulted, including Title IV eligibility.· Wage garnishment ends and income tax refunds are no longer withheld.