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Student LoansCongratulations! If you are reading this, then you likely have a son or daughter who is graduating high school this May and will be going off to college in the Fall. Right now is a wonderful time to celebrate our Georgia grads and wish them luck as they take this next step in their educational journey.

However, the reality is that for many families this joy may be tempered by the stark reality that their household is about to take out tens of thousands of dollars in student loan debts in order to finance their children’s education.

Whether your child is attending the University of Georgia, the Georgia Institute of Technology, or an out of state school, it is very important for both you and your child to know exactly what happens when you sign on that dotted line. Read on to learn about the 3 things families should know about student loans, and be sure to contact our office to speak to one of our experienced attorneys if you have any debt-related questions. We look forward to speaking with you!

1. Know the precise loan amount AND the interest rate.

The best way to prepare for financing your or your child’s education is to get a clear picture of the big picture – that is, exactly how much money you need and what the repayment terms of the loan or loans will be. Many families take out multiple loans from different providers, both public and private. Each separate loan likely comes with its own individual and different terms – and all of these numbers can certainly make your head spin. Before letting it get out of control, consider making a simple spreadsheet and organize the loans by amount, provider, and interest rate. (If spreadsheets aren’t for you, simple pen and paper would do just fine).

Importantly, make absolutely sure that you know if any of the loans have variable interest rates that kick in at different points. There is a big difference in the amount of interest paid on a loan taken at a 2.5% rate and a loan taken at a 8% rate.

2. Know the due date the first payment.

The first payment on student loans is often between 6 and 9 months after the student graduates the highest level of education. For example, let’s say that a student immediately begins a graduate program upon completing a bachelor’s program. Most loan service providers will allow the student to delay making that first payment on the bachelor degree loans until after he or she completes the graduate program (or doctoral program should the student pursue an even higher level of education).

Please note that at this point students are strongly cautioned to remember that they cannot be students forever, and that a poor job market is rarely a good reason to get another a degree (which likely means taking out even more loans) just to delay paying back the loans from the first degree.

3. Know who to call for information about loans AND financial aid.

If you are unsure of any of the terms of a loan, you should absolutely contact the servicer for clarification before signing the loan document. In most cases, claiming that you did not understand a provision 4 years later will not allow you to get out of that provision.

Additionally, don’t forget about financial aid. Contrary to popular belief, universities have a lot of money and a lot of wiggle room when it comes to financial aid. There have been many instances where a student calls up the university and truthfully informs the school that there is no way the student can attend unless the financial aid package is increased by at least $7,500 – and the next morning a revised financial aid document appears in the student’s email.