How to Repay Massage School Student Loans Efficiently

Student loans are a great way of funding your dream of becoming a massage therapist. But, unlike other funding options such as scholarships, the loans have to be paid back.

Depending on where you took out the loan from, the payment structure will vary. For example, Federal student loan plans are quite easy to repay, as they have flexible requirements. However, loans taken from private institutions may be slightly more difficult to pay off.

Regardless of where you are planning to take out the loan from, it is best to consider all aspects before making a decision. Your education is definitely important, but you do not want to be stuck with debts you cannot afford to pay off.

In case of a federal loan, the government will be assigning a servicer to you. The servicer is responsible for helping you devise a strategy to repay your loan after you finish school. This includes the repayment terms, interest rates, etc. Let’s look at how you should repay massage school student loans efficiently:

Repaying a Federal Student Loan

Federal Student loans are granted by the government. These loans typically cover everything related to your education. If you wish, you can even take out a loan for certain added education related expenses – for example a laptop computer.

The best option is to handle as many expenses as possible on your own instead of going for a loan. For example, you could get a part time job while attending school. This will keep your loan payments down to a minimum down the road. Moreover, you should try to cut down on living expenditures by finding a school close to home. This can prove to be helpful if you are living with your parents.

Payment Plans

If you have taken out a Federal student loan, you have a definite advantage. This is due to the fact that you do not have to begin paying the loan straight out of massage school. There is a grace period on all Federal Loans, which can be anything from six to nine months. This grace period is given to give you an opportunity to establish yourself as a professional.

The government takes into account the fact that you cannot begin making payments immediately. You will require time to get settled in your profession after completing massage school. Moreover, you will also need time to find a job. Of course, if you are planning to start your own business, you will require some more time to get established. This is why the grace period is often a good thing.

Do keep in mind that you do not have to make use of the entire time frame you are given. If you are able to get a job or open your own business, and are able to make payments before the time is up, do so. In some cases, interest is charged for the grace period as well. Even if you do not have to pay any interest, it is best to begin making payments as soon as you possibly can.

The sooner you start, the sooner you will be able to repay the entire loan. If you do not want to begin making payments immediately, you can always set up a fund for paying back your loan. Keep adding more money to the fund every month. This way, when you begin receiving the monthly bills, you will have some money tucked away for making the necessary payments.

Time Frame to Pay Back Loan

There are several types of payment plans that you can opt for to repay your loan. By default the payment has to be made in ten years. However, if you need more time, you can opt for the 20 or 30 year plan as well. This could mean a lesser monthly bill.

But, you will be paying a lot more in the long term, if you consider the interest rate. The arrangement that you prefer have to be approved by your loan servicer. This servicer is assigned by the government for your guidance.

Interest Rate

The interest rate for Federal student loans is not constant. The type of loan that you opt for decides the interest rate that you will pay. The highest interest that you will be charged is 6.8%.
However, you may even be charged a rate as low as 3.4%. These numbers fluctuate with time, but should give you a general idea of the ballpark interest rates involved.

Inability to Make Payments

There are cases where individuals are not able to make regular payments. There may be quite a few reasons for this. Bear in mind that a student loan debt cannot be eradicated by declaring bankruptcy.

However, if you are having problems paying your debt, you can take a temporary break from it. Moreover, if you are having problems making ends meet because of the loan, you can have the payment adjusted.

The loan payment per month will be revised in accordance with your income. This will make repaying the loan easier for you. Try to adhere to your monthly loan payments as much as possible.

If you fail to do so, the amount may be deducted from your paycheck. If you do not make loan payments for a while, the government may directly deduct a certain amount from your salary through the wage garnishment process.

In some cases, the deducted amount can be as much as 15% of your salary. Moreover, the payment deduction will continue until the entire student loan is paid off. Therefore, you have to be vigilant in terms of handling your federal student loan payments.

Repaying a Private Student Loan

Student loans can also be taken out from private firms, banks, etc. The terms and conditions of your loan with such institutions are different from those stated by the government.

These terms and conditions are decided and agreed upon at the time you take out the loan. This includes the interest rate you will pay, the payment schedule and the payment term.

Do keep in mind that private loans are not as flexible as government ones. In most cases, you may even end up paying a late fee if you miss a payment date. Private firms are generally less lenient.

Since the payment structure for both government and private loans are completely different you have to be cautious. Make sure that you consider all relevant aspects before selecting either a Federal or a private student loan.

While this article gives a brief primer on the student loan topic, it is not by any means to most comprehensive piece we have written to address this important matter. If you’d like to learn more about student loans, how they work, repayment options and other relevant information, we highly recommend you read our more comprehensive write up here.

Neal Lyons is a founding member and volunteer contributor at the MTSI Institute, an information based portal dedicated to guiding and assisting aspiring massage therapists establish a successful career in massage. Neal is a published author and has collaborated on several mobile applications that serve the massage profession. You can view his published work on Amazon, iTunes, Barnes & Noble, Sony and Kobo. You can connect with him on Facebook, Twitter and on Google+

Posted in Financial Aid

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