Federal Student Aid - When to start paying?
I'm currently a freshmen. How should I go about paying off my FASFA loan? Should I start paying it off now? Do I want it to be paid off before the payment is actually due (2029)? I'd love to hear about other's experience with loans.
A Deeper Problem With Financial Aid:
I doubt anyone will have an exact answer or solution to what's going on with my aid right now. I used to be able to pay around $50 a month through the official Federal Student Aid website then going to the loan servicer website (Central Research, Inc). I had made 2 previous payments towards my loan on this website, however now when I go there my amount due which I can pay is 0. I look at my previous payments on the website and they don't match up to what I previously paid and what shows up on my bank statement. I'm not sure if anyone can help with this problem, I would still love to hear answers to the previous questions!
2 answers
Bobbi’s Answer
You're doing great by considering your FAFSA loan payments ahead of time. Even if you can only make small or occasional payments now, it can really help reduce your debt later. This means your future payments will be smaller and more manageable. Another smart move is to save some money now, so you might not need to borrow as much next year. Both choices will help keep your debt lower after you graduate.
For any questions about your payments, check out the "contact us" options on your loan servicer's site and the studentaid.gov website. They can help clear up any confusion or fix any mistakes you might find.
Wishing you all the best in your studies!
Thanks Bobbi, I really appreciate your advice! I am planning on calling the loan servicer later today.
Srey
Ravini’s Answer
Paying loans while still in school seems wise, but once you graduate, you might need funds for interviews, moving, or travel. It's helpful to have savings until you start receiving a regular paycheck. Government student loans usually have lower interest rates than credit cards, so try to avoid using credit cards.
When you start paying off loans, focus on those with the highest interest rates first. I learned from experience that if you don't specify, payments might go to the largest principal balance instead. You might need to call to correct this.
Don't forget about tax benefits when repaying loans. Consider contributing to your 401K before paying off loans to get a match and reduce taxable income. Check if you can maximize deductions from paying off loan interest before it capitalizes. Also, think about investing in an HSA. Investing can often yield more returns than simply paying off loans, especially with government loans.
Saving more money now will benefit you in the long run. Your loans will eventually be paid off, and you'll have more financial freedom to enjoy other aspects of life.