Fast Fact

In a survey of parents across all income levels, 70% expect their child to take more than 5 years to pay off their student loans.

Source: College Savings Foundation, 2008

After College

Transition loan responsibilities to your child.

When your son or daughter graduates, withdraws from school, or drops below half-time status, he or she may have a grace period, during which there are no required loan payments.

The grace period gives your child time to find employment, and it gives you time to officially transfer any loan management that you may have taken on.

Step 1. Give your child all of his or her loan paperwork.

Sit down with your son or daughter and discuss the state of the loan. Discuss any payments you have made to date. Make sure your son or daughter knows the names of the lenders/loan servicers and has the correct contact information.

Step 2. Contact the lender/loan servicer.

If your son or daughter is moving out on his or her own, make sure your child gives the lender/loan servicer his or her current mailing address so your child will receive all billing statements and mailed communications regarding the loan.

Step 3. Always be available to answer questions and provide support.

It goes without saying that you do this anyway in your role as parent. Once you turn over loan responsibilities, you can expect your child to have questions about the loan and seek your advice. Encourage your child to deal with debt responsibly and help build good credit.

Find reliable financial resources.

The most important thing you can do when communicating with your child about his or her loan or general finances is to provide ACCURATE information.

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