Repaying Your Federal and Private Massage School Loans

There is a lot of information on the internet about massage school loans, the various types and how to obtain them. We have a similar summary of available options here.

What we have not found on the internet is a detailed discussion about these loans, the interest rates involved, the repayment terms and process and what all this means for you. In this article we want to shed some light on this topic.

Loans are part of the overall financial aid package you can be awarded when you apply for financial aid. Even if you don’t apply for aid, you can obtain some private loans from various private sources.

Loans, no matter what kind and from who have to be repaid at some point. There are two primary types of loans that are common in the education space, Federal and private loans.

The main advantage with Federal loans is that some come with very low interest rates and favorable terms for the students. These loans are often subsidized by the Government. Let’s discuss the two types of loans in more detail below.

Repaying Back Federal Student Loans

Federal student loans are often sponsored by the Government and thus many of these are highly subsidized. Although some of the loans accrue interest (some do not – at least while you are in school), you don’t have to pay them while you are in school full time.

Even after graduation, you have another six to nine months of “grace period” before you start repaying them. This time is allotted for you to land a job and set situated in your career and life after school. You should not have any issues finding a job given the number of massage jobs are growing everywhere.

It is your responsibility as a borrower to understand when your payments begin and to start making them. That said, often times you will start receiving letters and bills in the mail reminding you of the payments due, if the address on file with the lender is the accurate. Be sure to update your address with your lenders if and when you move to ensure you receive all the communication on a timely basis.

In general, Federal loans are typically repaid over a 10 year period. You can also repay quicker if you have extra funds or are surprised with a windfall such as an inheritance. There are ways you can extend the payment period term on these loans by contacting your lender.

We have seen these loans stretched to 20 and 30 year payment term periods. The interest rate on Federal student loans is generally lower than the market rate at the time you take the loan. The interest rate will be locked in at the time you receive the aid. These rates range from 3% to 7%.

It is important to stay on top of your monthly payments because these loans are granted to you by the Government. If you do not pay your loans back, the Government has many ways to find you and collect payment.

For example, it can garnish your wages and take them, which means you won’t get your salary paid to you, or at least not all of it. A good chunk of it will go straight to the Government. Remember they have your social security number and can track you down.

Student loan debt is one of the few types of debts that you just cannot eliminate without repaying it back. Many people think declaring bankruptcy or leaving the country will eliminate such debt, but that is far from the truth.

Although most people do their best to repay these loans on time, life does happen and sometimes brings hardships with it. If and when that happens, understand that there are various programs out there that you can reach out to for help.

For example, you can contact your lender and request a forbearance or a loan deferment, which are periods of time where you don’t have to make payments if you qualify under certain situations. Two such situation are going back to school to take additional classes and financial hardship due to job loss. If you don’t qualify for a full stoppage of payments, you may qualify to make reduced payments until such time that your situation returns back to “normal”.

In summary, the entire repayment process of Federal student loans is really simple. The key is communication. First of all, make sure the right address for you is listed in their files. Second, read and respond (if needed) to all communication (mail, email, calls) you receive from your lender. Finally, proactively reach out to your lender immediately if and when you feel you are in a situation where you cannot make the loan repayments on time.

Repaying Back Private Student Loans

Private student loans are different from Federal student loans. These are offered by third party businesses and not governments. Their interest rates are more in par with the market interest rates offered by other lenders.  These loans are straight forward in terms of repayment.

Generally, they start accruing interest when you take them out. Repayments are also due immediately. Think about these similar to car payments or house payments (mortgages) where you take out a loan and then start repaying it each month that passes by.

Private lenders often do not offer loan deferments or forbearance terms, but many do have hardship programs. Again, the key is proactive communication and cooperation on your part.

Unlike Federal loans however, private loans are more flexible in terms of consolidation. We are not recommending that you consolidate your loans. Rather, we are simply stating a fact which is that private loans offer more flexibility if and when you contemplate loan consolidation (bunching up several loans into one monthly payment).

Paying back your loans, regardless of what type of loans they are, is a serious matter that you need to attend to carefully. The Government wants you to succeed so that you can become a contributing member to society, earn money and pay taxes to support the system.

There is plenty of information available online in the event you find yourself in a situation where you are having difficulty making payments. Visit the Government’s student aid site for more information on this topic. Federal Student Aid Department

You can also read more about the two types of loans and more details on each 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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