Federal Student Loans: Choose the Best Repayment Option
Adam Rifkin stashed this in Student Loans
See the above infographic with a flow chart that gives you student loan repayment options: standard, graduated, extended, income-driven, public service loan forgiveness after 10 years, consolidation, and refinancing.
From the article:
If you’re in the States, find a tool that calculates whether you qualify for income-based repayment — via President Obama’s William D. Ford Direct Loan Program — and go from there. However, a warning: there are a number of different options for student loan repayment now, so beware of private companies that want you to refinance with them so that they can make a profit.
While it may be tempting to simply allow your student loans to go into default, it’s probably not wise in the long run. Defaulting can result in wage garnishment, tax refund withholding, even the revoking of your driver’s license! That’s nothing to fool around with. Better to go with the twenty-five year plan, if you’re short on cash — as many of us are these days. There are a number of steps you can take to gain more control over your finances, even if you don’t feel like you have a lot of expendable income.
First, focus on what you can control. How much money is left after you put aside your basic monthly expenses and student loan expenses? As difficult as it might seem, try to set aside a little each month for a savings account. You’ll be grateful when an unexpected expense comes along. And try not to rack up a lot of excess credit card debt. If you can’t afford to pay for something, maybe it’s not worth the additional expense every month. If there isn’t enough money at the end of the day to simply get by, perhaps it’s time to reevaluate your career path and consider setting a goal to get a better job or return to school for a specialized certificate or a different career altogether.