Fighting Loans the Biggest Student Battle

Lisette Tinler is ready to graduate from FiskUniversity with herbusiness degree in hand. However, she is not prepared to pay offthe federal student loans she has accrued.

“I’m $30,000 in debt. There goes any dream ofpurchasing a nice car or home in the next ten years.” 

As graduation approaches, seniors have to puton their armor to fight their loan debt.  The four most commonloans college students take out are:


  • Stafford Loans: can be subsidized orunsubsidized by the federal government; has a financial needrequirement; has a grace period of six months after students dropbelow half-time, graduates, or leaves school.


  • PLUS Loans (Parent Loan for UndergraduateStudents): allows parents to borrow money; has a grace period of 60days after full disbursement.


  • Private loans: used as a supplemental loan tofederal government loans; has variable grace periods.


  • Consolidation Loan: combines loan into oneloan from a single lender; grace period of six months after studentdrops below half time, graduates, or leaves schools.


Staci Schiller, communications manager forWells Fargo Education Financial Services offers the following tipsfor soon-to-be college graduates.


  • Before graduation, one should plan theirbudget: Students should know the status of their starting salary. Loan repayments should comprise about 10 percent of a collegegraduate’s income.  Students should also stay mindful that themaximum repayment period is ten years.


  • Stay in touch with your lender: They can helpwith managing and postponing the loan payment.


  • Find out about automatic payments: Having itset up where payments are already extracted from one’s bank accountmakes it easier to stay on schedule.


  • Look into loan consolidation: While federalloans usually have variable interest rates.


Paywhat you can: Defaulting on one’s loan can lead to a bad credithistory.