When you graduate, you'll have a grace period of a few months and then it's time to start paying for your education. Before you think about skipping out on your payments, you need to consider what will happen if you default on your student loans.
Your loans are considered to be in default when you don't make any payments for 270 days, and you haven't made any previous arrangements with your lender. College students don't have to repay while they are in college, or if they continue their education at post graduate school. But once they graduate and the grace period is over, they have to repay their student loans.
There are a lot of good reasons to stay current with your student loans. Once a student loan has gone into default, the entire balance is due. Your defaulted loans will appear on your credit report for up to seven years and you are still responsible for your student loans even if you declare bankruptcy.
The government can collect the balance on your loans through a variety of different channels. They may hold onto any tax refunds that you earn until the balance is paid. This is, in fact, often the first step that the government and lenders use to collect money. They may also choose to garnish your paycheck. This means they can take up to 15 percent of your disposable income, as long as it's not more than 30 times the minimum wage. You have a right to object these methods, but if you do the next step is usually a lawsuit from your lender. There's no time limit on suing for student loans like there is for other types of debt. If you go into default, you could be sued at any time for the money that you owe.
Fortunately, for most college students, the picture doesn't have to be this grim. Lenders offer their borrowers a lot of different repayment options and financial assistance before loans reach the default status. If you're having trouble making your monthly payments, talk to your lender about forbearance or deferment. Both of these options will extend your grace period and allow you to get into a better financial situation before repaying your loans.
 | When you're trying to manage your student loan repayment, not to mention any other debts you may have, several strategies can yield positive results. The key to repaying your loans successfully is to be proactive and choose the right strategy for your circumstances. |
 | If you're looking for a student loan, lenders consider all aspects of your financial history, and you might consider poor credit student loans. Before you apply for a poor credit student loan, be aware of your other options, and start thinking about improving your credit. |
The cost of a college education can mean years of student loan debt for many, but through student loan forgiveness programs, some or all of a graduate's student loan can be forgiven. While there are certain conditions that apply, for those who take advantage of the various programs, it can be a cost-effective solution to reducing student loan debt. |
 | Finding the right student loan company is a challenge because student loans are not one-size-fits-all propositions; what's right for you may not be right for your best friend, or any other college student. Learn about various student loan providers to make sure you find the right student loan company for your college financing needs. |
 | Student loans are a complicated topic, especially if you have to refinance a student loan. In many cases, it makes sense to refinance a student loan, but not necessarily in every case. Is it a good idea for you? |
