Advice I gave my recently graduated friends shared with you

My brother’s girlfriends graduated from college recently and just had her graduation party last week.  At this party due to my position, her and some of her friends were asking my advice on what they need to know about loans.  While I realize that graduation was such very distinctly May,  I can think of no better way to kick off June than to offer the same advice that I offered them.

1) You get 6 months of grace period till your payments start

This is assuming you were at least a half time student all through school.  Regardless of your situation, you are not able to “extend” your grace period for any reason.  Also after you use your full 6 month grace period on a loan, you cannot get a second one.

2)Your interest can still accrue while in grace, even if the loans are subsidized

If you loans were disbursed after July 1, 2012, once you are into your grace period, you will begin to accrue interest.  For loans disbursed before this date you will not begin to accrue interest until you enter repayment.  For unsubsidized loans, you have been accruing interest from day one.

3) Planning to pay off your loans doesn’t start with your first bill

This is the most important piece of advice I can give.  Contact your servicer as soon as possible with questions.  Look at repayment estimator calculators.  Don’t plan your “big kid” budget without figuring out what student loans will be.  You should be thinking of this from the time you enter school but definitely put this thinking into overdrive once you enter grace

4) It is always better to be in repayment than not

If you have the option of being in repayment (even if its a $0.00 Income Driven plan) or having a forbearance or deferment, it is always better to be in repayment.  Especially when it comes to Income Driven plans as this will give you a long term solution that may lead to loan cancellation.  In addition, making any type of payment is better than making nothing.

5) Never be afraid to ask questions

This applies to your loan servicer or someone who has had loans before and is knowledgeable about the process.  I was shocked about how little I knew about the process before taking this job and loved soaking in the information.  If you have someone you have access to that can help you in these situations, definitely take advantage of it!