What happens to your monthly student loan payments if you go back to school?

Going back to school is a big investment of time and money. So you have to have a strategy. And the first part of that plan is figuring out how to handle the debt you already have.

If you have Federal loans…

Just like when you first attended school, payment on federally subsidized loans and unsubsidized loans is deferred as long as you’re enrolled at least half-time. Contact your school for complete student status information.

What about interest on Federal loans?

As long as you’re attending an accredited school, the Federal government covers the interest on your Federal Subsidized loans; however, your unsubsidized loans will continue to accrue interest. Make sure you look at the projected interest on your loans so you know how much you’re going to be responsible for after you graduate.

If you have private loans…

It’s completely up to your private lender to defer your loans, or not, while you’re going for your degree. Contact them directly to find out. But even if they do, the interest on your loans will continue to accumulate. Again, make sure you have a clear picture of your future financial obligations before going forward. It’s easy to forget about debt when the monthly bills stop coming, but it’s a terrible shock when you are on the wrong side of the compounding interest equation.

How should I pay for grad school?

Then, after you have a clear picture of your current obligations, it’s time to think about paying for school.

1. Fill out your FAFSA to see what Federal or school grants you qualify for
2. Search for Federal and State technical training programs
3. Look on the web for scholarships that specifically apply to people over 30
4. Make sure you take advantage of the Lifetime Learning Tax Credit (LLC), good for up to $2,000 a year. And if this is the first time you’re attending college, don’t forget to claim the $2,500 American Opportunity Credit on your taxes.
5. Also, ask your employer if they offer educational benefits. They’ll be getting a more productive employee, after all. So it really is an investment in their company. (Employers can pay up to $5,250 per year as long as they offer the same educational opportunity to all employees.)
6. And if unemployed, the new G.I. Bill includes benefits that can, in some cases, cover all tuition and fees, provide a housing stipend and pay up to $1,000 a year for books and supplies. These benefits can also be transferred to dependents in some cases.

Again, make sure you have a crystal clear picture of your future financial obligations before rushing ahead. Even if you’re sure your new skills are going to provide a great income after graduation, financial planning is still one of the most important lessons you can learn. Because when you’ve got that ‘down pat’, you’re going to be able to move forward with a lot more confidence in life and come out ahead.

If you have any other questions about managing your student loan debt, please be sure to contact our friendly and knowledgeable student loan specialists at (844) 906 – 0747.