The six-month grace period for student loans of those who graduated in May ends in November. The Pennsylvania Higher Education Assistance Agency encourages borrowers to seek advice on how to pay off their loans. Most college loans include a grace period after graduation to stall repayment until the graduates are financially stable and settled into jobs. PHEAA spokesperson Keith New says that even in the current struggling job market, there are repayment plans that can fit each unique case.
“There are hardship and unemployment deferments and forbearances that are available there are Graduated Repayment Plans, and Income Sensitive Repayment plans,” New says. “So there are a variety of tools out there that are intended to help them should they encounter any difficulties.”
New says that although the repayment defaults have risen in the struggling economy, borrowers are being more proactive in communicating with the loan provider that they need help.
“It benefits everybody to make sure we have our borrowers staying in good repayment standings,” New says. “Our default rate still is very low compared with most parts of the country and we think that’s because of our activity to prevent that from happening.”
New says the PHEAA works proactively with borrowers to prevent defaults but borrowers in trouble must make the first move.
“The trick is to get everybody to call their loan service,” New says. “We need them to run towards the problem not run away from the problem. Too often people encounter difficulties paying a bill and they hope it’s going to go away and as with other things it won’t, but there are tools here to help you.”
The PHEAA customer service staff’s role is to help borrowers discuss the payment plans that fit them best, and New says they encourage graduates to take advantage of free resources that help graduates or soon-to-be graduates to plan for their financial future responsibly.