Five Top Reminders for Student Loan Counseling about Grace

Submitted By Brenda McCafferty, Outreach Manager, ECMC

Most students are focused on their education, studying, exams and just enjoying their college experience. Their loans and the fact they have to repay them are placed on the back burner until they come closer to graduation. For students who withdraw from school, understanding their loans and options early on is especially important. Many students are so focused on finding their perfect job after graduation that they wait even longer and scramble right before their grace ends to understand the options available. Often Grace comes and goes before reality hits that a payment easily becomes past due.

To that end, ECMC has created a Top Five list for you to use when counseling students about their grace period

#5 – Develop a system that gets information on grace period and repayment options into students’ hands. At the very minimum, students should be made aware of their rights and responsibilities, repayment options, grace period and servicer contact information. As an added bonus, offer exit counseling workshops and connect them with career services. Students’ six-month grace period will pass quickly if they do not enter grace with basic rules of grace and tools to plan for repayment.

#4 – Develop a system that gets information on grace period and repayment options into students’ hands. At the very minimum, students should be made aware of their rights and responsibilities, repayment options, grace period and servicer contact information. As an added bonus, offer exit counseling workshops and connect them with career services. You can also provide a simple budget worksheet to get them started thinking about their future finances. Often a student’s grace period begins and ends with increase financial responsibilities but no real budget planned to make a timely first student loan payment.

#3 – The grace period is a planning period, a time to prepare for repayment of your federal student loans. The six-month timeframe is intended for students to get their affairs in order after graduation, find a job, get settled, etc. Stress that no payment required does not mean don’t make a payment.  Some loans have interest accruing during the grace period.  Educate the facts about each loan and note different student loan programs may have different grace periods.

#2 – After students have left school, it can prove very beneficial to continue contact with them by sending quarterly updates. Create a simple HTML email explaining how to identify and contact their servicer, list current repayment options, provide information on deferment and forbearance, and most importantly, the consequences of default.

#1 – Create a student loan “Hot Sheet,” a quick reference chart and a final reminder of their responsibilities. These small steps are really pretty simple, don’t take up too much of your time, and the benefits are recognizable and pretty immediate. Bold date first payment is due and if possible provide estimate of student loan payment.