But for some students, parents repay those loans.
Whether the debt is actually your parents responsibility depends on the key in of loan, though.
Either way, when parents stop paying, it can put some stress on the former student.
Ourstep-by-step guidemakes filling out the FAFSA (mostly) painless.
We have some tips to help you navigate the situation.
But some loans are issued to parents, and those loans will be their legal responsibility to repay.
Its important to understand the distinction.
After you complete the FAFSA, your chosen college will send a financial aid offer.
Information on unsubsidized loans will also be included in this package.
No Interest Til Almost 2027?
Youll accrue interest from the date the funds are issued, even while youre in school.
Some students opt to take out private student loans rather than rely on federal student aid.
Did you know?
Although both types require payments begin immediately after graduation, borrowers can request a six-month deferment.
Direct Consolidation Loans
As with any loan pop in, student loans can be adjusted over time.
ADirect Consolidation Loanlets you combine multiple student loans into one to lower your monthly payment.
Doing this may also help qualify you for certainloan forgiveness programs.
Another benefit of going the governmental route is that there are no program fees.
For Parent PLUS Loans, that means your parents will owe the money.
For all other loan types, though, you, the student, hold the ultimate responsibility.
As with Parent PLUS loans, you’ve got the option to have a little help paying them.
Nothing is stopping your parents from dropping some money into your account to help with the expense.
But if one day they stop helping, youll have to make that payment on your own.
Here are a few.
On federal loans, this can be as much as 6 percent of the monthly payment due.
This fee will continue with each missed payment.
Most loans allow a little leeway in making your payments.
Check the fine print to see how many days you have before a late fee is charged.
This applies whether its a federal or private loan.
Loan Default
After 270 days, or nine months, your federal loanwill go into default.
The Consumer Financial Protection Bureau reports thatprivate student loans defaultin as little as 90 days.
Once a loan defaults, the total amount, including all interest, will be due.
Youll also be ineligible for deferment or payment plan changes.
Wages may be garnished and your tax refund will likely be held and put toward the payment.
The lender/loan holder may also take you to court to collect the funds.
Theaverage federal student loan debtis $37,338, and that bumps up to $54,921 with private loans.
Being suddenly saddled with that billcan put a serious dentin your budget.
Below are some steps to take if your parents stop paying on your loan.
If its a private loan, youll need to track down the paperwork with the lender.
However, chances are, its a federal loan.
If so, log into your account atStudentAid.govand find your loan on your dashboard.
Your loan documentation should provide payment terms and grace periods.
Discuss the Situation with Your Parents
Did your parents sit you down and discuss their circumstances?
If not, take them aside and have a respectful conversation.
venture to keep feelings out of it and work out a solution.
Private lenders are also amenable to negotiations.
If you’re free to work something out that keeps payments coming, it benefits everyone involved.
Consider Refinancing
If your loan hasnt been refinanced recently, look into options.
Federal loans can be refinanced with private lenders, reducing your monthly payment and lowering your interest rate.
Before refinancing a federal student loan, though, be aware of the downside.
Youll lose benefits likedeferment and forbearance, as well as access to any future student loan emergency relief.
Stephanie Faris is a professional finance writer with more than a decade of experience.
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