Student Loan Repayment - Life After College
Recent college graduates all across the country are navigating life after college. In the midst of searching for jobs, finding affordable places to live, living on a budget and managing their student loan repayment, graduates are working hard each day to traverse the new world they find themselves in. The purpose of this blog is to inform these new graduates on the importance and purpose of their student loan “Grace Status”.
What is Grace Status?
Grace Status is a benefit to deferred-loan borrowers that delays the loan repayment process for six months after the student graduates, leaves his/her program, or reduces his/her hours to less than half-time status while in school.
What does that mean for students who graduated this past spring? It means this window of time, or “grace period,” offers some breathing room! It allows students some time to secure a job, find a place to live, prepare a budget and generally get their financial house in order without the added stress of making their monthly student loan payment.
Students are not required to make payments on their student loans during this grace period but most student loan servicers will be in touch with borrowers about when their repayment begins. Often borrowers will also receive information on various repayment options as well as an estimated monthly repayment amount. All this information is shared with student loan borrowers ahead of time to help them transition to a smooth repayment process.
The budgeting worksheet below is a great way for new graduates to see how they are spending their money and to help them find areas where they may be able to adjust their spending before it comes time to begin student loan repayment. Sitting down and reviewing financial responsibilities can be a bit scary, but not understanding what is ahead can create even more challenges during repayment. The more information and greater understanding students have on their responsibilities in repayment, the better off they will be.
The next blog in our student loan repayment series will deal with the importance of communicating with your servicer. In the interim, MEFA can help with additional tips on managing student loan repayment, click here: https://www.mefa.org/pay/