June 29, 2015 -- As Class of 2015 graduates head out on job interviews, the money many borrowed to help subsidize their higher education may be just a distant memory. Federal Subsidized and Unsubsidized Direct Loans have a six-month grace period that gives borrowers time to find a steady source of income before repayment begins, but students should use this time to fully understand the details of repayment so they can save time and money down the road.
Sixty percent of bachelor’s degree recipients at four-year public and private nonprofit institutions graduated with debt in 2013, according to the College Board’s Trends in Student Aid 2014. The average amount borrowed was $27,300 -- up $3,200 from the average amount borrowed just five years prior by 2008 graduates.
Members of the National Association of Student Financial Aid Administrators (NASFAA) can offer advice on how to review and select repayment plans, where to find the total amount owed, how to avoid default, and what can be done if students are having trouble making payments.
“There is no penalty for making federal student loan payments before the grace period ends,” said Justin Draeger, president of NASFAA. “It’s never too early to get a jump-start on debt reduction -- but if that isn’t yet a financial possibility, students should still use the summer months to educate themselves about their total indebtedness and repayment options. College financial aid professionals stand ready to help, even for borrowers who have already graduated.”
2014 data from the U.S. Department of Education show 13.7 percent of borrowers end up in default within three years, a slight drop from the year prior. To guard against default, borrowers should direct any questions about repayment to their alma matter’s financial aid office and use the free tools at their disposal -- like ED’s Financial Awareness Counseling Tool (FACT) and the National Student Loan Data System for Students (NSLDS).
To request an interview with a NASFAA spokesperson, please email firstname.lastname@example.org or call (202) 785-6959.
The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents more than 20,000 financial aid professionals at nearly 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the United States. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit www.nasfaa.org.
Publication Date: 6/29/2015