The Main Points

Student loan debt adds up quickly
Have realistic expectations of your starting salary so you can estimate how much student loan debt you can afford
Not paying back student loans can have major consequences
Student loans are NOT free money
Only ask for what you NEED

Getting Out of Default

After 6 months of on-time payments
you may be eligible for more financial aid.

After 10 months of on-time payments and
applying for and receiving “rehabilitation,”
your loan is no longer in default. The record
of default will be removed from reports to
credit bureaus.

What If I Don’t Repay My Loan on Time...

You could be sued.
Your credit record could be damaged.
Your automobile could be impounded.
Your employer could find out.
You could lose a professional license issued by the state.
Your pay could be garnished.
You could forfeit a state or federal income tax refund.

Postponing Repayment

You can postpone repaying a loan through:
Forbearance – Lender lets you postpone or reduce payments, but interest charges continue to accrue. Must apply and typically granted in 12-month intervals for up to 3 years. Usually for extreme financial hardship or other unusual circumstances.

Postponing Repayment

You can postpone repayment through:

Deferment – Lender lets you postpone paying
the principal. Usually can defer a loan while
in school at least half-time. May be available
for unemployment or economic hardship.

What if I have not paid?

If you’re in default, your options are:

Postpone repayment

Choose another repayment plan

Contact the lender for help.

What If I Can’t Pay?

If you are late or miss one or more payments
you’re delinquent.
Miss more than one payment, or go more than
270 days without making a payment,
and you could be in default.

2005 Starting Salaries for BA Degree

By Curriculum for All Types of Employers Fall 2005
Business Administration $39,480
Liberal Arts $32,725
Computer Science $50,664
Chemical Engineering $53,639
Agriculture & Natural Resources $32,092
Education $31,015

How Much Debt Can You Repay?

Loan at 6% Minimum Annual Income Needed
Less than $5,000 $6,661
$5,000 to $9,999 $13,321
$10,000 to $24,000 $33,304
$25,000 + $67,704
Student Loan Payments Should Not Be More Than
10% of Gross First Year Salary