Tackling student loan debt one payment at a time

By  | 

MARQUETTE, Mich. (WLUC) - $30,000 - that's the average student loan debt that recent college graduates are left with.

"Once a student enters repayment, they'll have a six month grace period on their direct loans before those loans enter repayment," says Mike Rotundo, Director of Financial Aid at Northern Michigan University.

Now, that grace period is going to an end.

Rotundo says there are several mistakes recent grads make with their student loans, such as not updating the federal servicers with their new address, or picking the wrong payment plan.

"There is a lot of latitude and there's many different payment plans, several that are based upon income, that students can switch from one to the other," says Rotundo. "So, they would work with their federal servicer if they find that they have either the wrong payment plan or maybe the wrong date of the month to make their payments, they can work with the servicer to change that as well."

But these issues come from a source - picking the place where your student loan comes from.

While NMU can't advise private versus public loans, Scott and Taylor at Northwestern Mutual of Marquette suggest the public loans route.

"If you become disabled, if you die, those loans actually kind of vanish. You're not going to have to kind of foist them on a spouse or a family member or that sort of thing," says Taylor Klipp, a wealth manager for Northwestern Mutual. "So you always want to squeeze out as much public loan money as you can first."

"And sometimes there's more repayment options with the public loans versus the private," Scott Sampeer, financial advisor, adds. "So they'll likely work with you more."

Those benefits are in addition to generally lower interest rates.

But regardless of the route you take, remember that you have to pay it off eventually.

"Be aware of what you're taking out and understand that it's not free money. And then as soon as you're out of school and it comes time to pay those back, actually act now," says Klipp.

"The key is, be prepared, get organized, sit down and talk with somebody like a financial expert, go through the options, and don't ignore because they have to be repaid at some point," says Sampeer.