header
Issuenelnet.com

index_top
index_bottom
 

   

Survey Says: Graduates Capable of Loan Repayment

 


A recent survey of 4,100 college graduates, conducted by Nelnet, found that 52 percent are in a good position to begin making student loan payments, because they are either financially prepared or are establishing a monthly budget. These results would seem counter to data released by the College Board on October 24, 2006, showing that tuition rose 35 percent this past year for public universities while Federal Pell Grant dollars declined by $900 million.

Spring 2006 college graduates with Federal Stafford loans made their first payments in November, after a six-month grace period. December graduates are now in their six-month grace period and preparing to enter into repayment.  Approximately 9.4 million U.S. undergraduates have Stafford loans.

“Although many college graduates said they are in a good position to begin making payments on their student loans, others are very concerned,” observed Eric Solomon, a Nelnet spokesperson. “College graduates who are not sure how they will afford their monthly student loan payments should contact their lenders to learn about repayment options and to see if student loan consolidation is right for them. There are a number of options available to help recent graduates repay their loans.”

According to the Nelnet survey, only 14 percent of graduates actually contacted their lender to discuss their financial situations.

Solomon believes that recent college graduates need to learn about available options for paying their Federal Stafford loans:

  • Standard Repayment requires borrowers to pay a set monthly amount (with a minimum of at least $50) for up to a maximum of 10 years. However, this set amount may be adjusted due to changes in the interest rate or loan balance.
  • Income Sensitive Repayment ties the payment amount to the borrower’s monthly gross income. The payment amount is adjusted annually. The maximum repayment period is 10 years; however, this period may be extended up to five additional years.
  • Graduated Repayment begins with smaller monthly payments that subsequently increase. The maximum repayment period is 10 years. The amount of the loan is used to determine how often and by how much payments increase.
  • Extended Repayment allows for repayment over a period of up to 25 years. The loan may be repaid under a standard or graduated schedule. To qualify for this repayment plan, the borrower must meet certain eligibility criteria.

 



 
     

© Nelnet 2007. Nelnet, Nteract, Ntrust, Ngenius, and Nservice are service marks of Nelnet, Inc. All rights reserved.