I hear from so many of you who are confused about how to deal with repaying your college loans. The best move you can make is to follow the advice of college financing expert Mark Kantrowitz, who runs the finaid.orgwebsite.
Mark has a great cheat-sheet on student loan repayment basics. A few highlights I want you to understand:
PRIVATE STUDENT LOANS
You can’t consolidate private loans with federal loans.
Don’t choose a long repayment term with a private loan. The standard repayment period is 20 years, but if you opt for a 30-year repayment schedule your monthly payments will only drop by 10 percent, yet your total loan costs over the life of the loan will be two-thirds higher than if you had stuck with the 20-year repayment term.
Even if you can’t keep up with the payments, remember that current federal law prohibits a bankruptcy court from discharging your debt. That is, your student loans—both federal and private-stay with you even after bankruptcy. (Some members of Congress want this rule to change; it’s a long shot these days given the mood in Washington, but you should let Senator Richard Durbinand Representative Danny Davisknow that you hope they will reintroduce legislation they proposed that would permit private loans to be discharged in bankruptcy.)