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If you have taken out loans to help pay for your child's education, it is important to communicate with your lender. This way, you can both determine the repayment plan that's correct for your budget. Effective for loans with a first disbursement on or after July 1, 2006, the interest rate for Federal PLUS Loans is fixed at 8.5%. For loans with a first disbursement on or before June 30, 2006, the interest rate for a Federal PLUS Loan is variable, adjusted annually on July 1, and cannot exceed nine percent over the life of the loan.
If your repayment plan doesn't meet your needs, causing you to miss or fall short of a payment over a period of time, your loan may default. A default can impact you, costing you more money and leaving you with a bad credit rating for up to seven years after the loan is paid in full. A bad credit rating can affect your opportunities for employment, credit cards, future loans, and buying or renting property. Avoid default altogether by selecting the appropriate payment plan. To satisfy default on a loan, you can either pay the loan in full, agree to repay it through a loan rehabilitation program, or apply for loan consolidation.
To help you manage your loan debt, and to successfully repay your loan, stay in touch with your lender, financial aid office or ISAC. Also, read any mail you receive regarding your loan, keep records in a safe place, stay current with your payments, and write your loan account number on all correspondence with your lender, and on your checks.
Click here for information on your child's student loans.
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