Repayment Strategies For Your Student Loans

"The party is over for the class of 2013," CNBC reports. "Students graduating from college enjoy a six-month grace period before they have to start repaying their loans. But for the latest crop of graduates, that period is now over, and those who have loans are figuring out how to pay them off. ... Student loan borrowers also receive loan counseling before they graduate from college. In addition, the federal government is starting to actively reach out to students to explain repayment options. With all this support, it's logical to think that delinquencies and defaults should be shrinking. But in fact, student loan default rates rose steadily from 4.6 percent in 2005 to over 10 percent in 2011, according to the federal data. Justin Draeger, president of the National Association of Student Financial Aid Administrators, thinks he knows why. The counseling sessions aren't reaching a key cohort of borrowers, he said, and those borrowers may be less motivated than most to repay their loans. 'The majority of people who are defaulting have characteristics in common: They have dropped out or stopped out of school. They probably didn't go through the counseling that's available to them' before graduation, he said. 'They may not be as vested in repaying their student loans because they feel they didn't get the education they deserved.' Then, too, some so–called debt relief firms mislead some borrowers, according to a report by the National Consumer Law Center. Even students who do finish college and receive regular counseling from their financial aid office may not be completely on top of their loan repayment options and responsibilities, said Scott Juedes, Wellesley College's director of financial services. His office provides ongoing information to students with loans, on top of the counseling required by the federal government. But even that may not do the trick, he said. 'Some students have loans at multiple lenders. There is not an easy way to track them.'" 

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