As the use of student loans to pay for college has increased, so have the many options now available to repay those loans and, potentially, even have them forgiven by the government. Whether a student is still in college and already has loans, or is in high school and considering how much to borrow, understanding the different loan repayment and forgiveness options available can help families make informed decisions. By choosing wisely, both students and parents will improve the likelihood that they will be able to save for, and achieve, a secure retirement.
Prior to taking out loans to finance a college education, families should understand the different repayment options that will be available post-graduation. In addition, families should consider whether monthly repayment amounts will be affordable based on a student’s projected career earnings in a desired field. Online tools are available to assist in modeling the repayment amounts that student loan debt will translate into during the repayment phase.
The purpose of this guide is to help families understand how loans can be repaid after graduation. It will first describe the available federal student loans, and the federal loan repayment and loan forgiveness options available. It will then provide information on borrowing from private lenders. The guide will conclude with a discussion of how some employers are now helping their employees pay back their loans more quickly.