Understanding student loans and what to watch out for
InvestigateTV - Debt for recent college grads averages around $30,000, according to 2020 numbers from the Institute for College Access and Success.
There’s usually a grace period after a student graduates college before their first loan payments are due, which is why it’s so important to have a conversation with your son or daughter about how student loans work.
Show them how to log into the portal and how to make payments. Cherry Dale, a financial coach with the Virginia Credit Union, said you also want to make sure they understand the consequences of loan default and collections.
“Students are not aware that once they graduate that student loan, if they have a student loan, will follow them the rest of their life, even if they declare bankruptcy. It’s very difficult to pull a student loan default from your credit report,” Dale explained.
They need to understand that the federal government can garnish their wages and take their tax returns if they don’t pay.
Also, if your child is about to go to college and hasn’t signed up for any loans yet, teach them the ins and outs of credit, so they understand how much they’ll owe and especially how long it will take to pay it all off.
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