Student loans to get through college can only be taken out during the current school year. That can leave graduates with four more more separate loans to repay.
Managing multiple loans can be tricky, but there are a few things to know about them that can make it easier:
Know who your student loan servicer is
Student loans can come from a bank or the federal government, and the loans can be outsourced to a bank or servicing firm. Whoever your student loan servicer is, that’s who you’ll deal with if you have questions and where you’ll be sending payments to. It won’t necessarily be the same financial institution where you took out the original loan.
You might have multiple loan servicers if your financial aid package is made up of different types of loans and is a mix of federal and private loans.
Paying federal student loans
Federal loans can be spread among a few loan services that you’ll have to keep track of and make sure you don’t miss any payments to.
If you apply for income-driven repayment plans, you’ll need to contact each loan servicer. Each may have a different deadline for the paperwork, which requires an income certification each year.
To find out who is the loan servicer for your federal student loans, or the status of any federal loans you have, use the National Student Loan Data System to retrieve your loan information.
Private loans
Private loans don’t have income-driven repayment plans, but they may have other options such as deferment or forbearance so that you don’t default on the loan.
Whatever types of student loans you have, expect the loan servicer to keep you informed of loan terms, repayment options and if the loan servicer is being changed because the loan is sold to another servicing company. Your new loan servicer should also contact you.
Consolidating loans
If you don’t want to deal with multiple loan servicers, you can consolidate or refinance your loans.
Federal loans can be consolidated with a Direct Consolidation Loan that still allows you to have the flexible repayment plans that federal loans offer. Private student loans can be consolidated through a larger private loan to replace the other loans.
If you have a combination of federal and private loans, you may want to keep your federal loans because they offer smaller monthly minimum payments, giving you more money to pay off your private loans quicker.
If you want to consolidate or refinance your student loans, be sure to shop for the best loan at the lowest interest rate.
