Paying Student Loans: What Happens When I Extend My Graduation Date?
When you applied for student loans, repayment probably seemed a long way off. If it’s taking you longer than four years to complete your degree, repayment may be further off still. Be sure you understand your loan’s terms so you know how your plans for completing your education may be affected.
Confirm your grace period with your lender
With almost all loans, there is a six-month grace period following graduation during which you do not have to begin paying student loans back. So, as long as you remain in school with at least part-time status, your loans won’t go into repayment until you graduate or drop out. (If you drop below part-time status, that will trigger the beginning of the grace period.) This will likely be true whether college takes you three or six years, but confirm that with the lender.
Ask your lender about lifetime borrowing limits
While you don’t have to worry about paying student loans until you’re done with school and hopefully have a job, you do need to think about borrowing maximums. With both private and federal loans, there are limits to how much you can borrow over the course of the loan. If you’ve already maxed out the funds available to you, you won’t be able to borrow any more.
This means you’ll need to find another way to pay for the remaining one or two years of college you’re considering. If you decide to reduce your course load and work to pay the bills, remember not to go below part-time status, or you’ll have to start repaying student loans in six months.
Learn about deferment of student loans
When you do begin your student loan repayment period, you may find you’re struggling to make payments. If this is the case, there are options available to you. You can first talk to your lender about options like income-based repayment, extended payment plans or graduated repayment plans. But, if you’re unable to afford any of those, you can also look into deferment of student loans. If you demonstrate sufficient economic hardship, military service obligations or certain other circumstances, you may qualify to defer paying your loans for a year. Going on to graduate school may also provide you with the opportunity to defer payments.
Stay on top of your student loan repayment
It’s very important to understand how repayment works and when it begins. Missing payments or defaulting on them can wreak havoc on your credit score, which in turn will hurt your chances of being approved for credit cards, buying a car or buying a home. If you can’t afford your payments, don’t hide from them. Ask about deferment or other options. Taking charge of your loans will only help you.
Sponsored content was created and provided by RBS Citizens Financial Group.
Student loans can be so tricky and I know their pain very well. I had 90k of debt coming out of school from my loans and I'm about to make my last payment on them now 7 years later. I was lucky that I got a good job right out of college and I never had to go into deferment or make late payments. It's a tough road, but it's worth it to stay on top of them.
When I took out student loans for my credential, I kept job prospects in mind and limited my debt. When I get a job, I'll be applying for the loan forgiveness program. Many government employee positions allow a borrower to pay for ten years and then will forgive the remaining amount.