Going to college can be a smart investment in your future, but given the bruised economy and bleak job market, a smart repayment plan is more important than ever. “The sooner you call your financial organization, the more that can be done to accommodate you and your student loans,” says Frank Cradduck, a financial center manager with Fifth Third Bank.

Getting started
Stafford Loans are one of the most common types of student loans. These government-issued loans are due for repayment starting six months after graduation, which allows you time to secure employment. However, if you find yourself without a job in that time frame, contact your financial institution as soon as possible to work out a different payment schedule. “For example, we may be able to help you defer your payments by a few months or work out an alternate arrangement,” says Cradduck.

Multiple payment options
Many types of loans have more than one repayment plan option and student loans are no different. These include, but are not limited to:

• Standard Repayment – With this option, you pay at least $50 each month until the loan is paid off, taking no more than 10 years.
• Extended Repayment – This plan is best if you can only afford smaller payments and owe at least $30,000. Monthly payments are fixed annually and the loan must be paid off within 25 years.
• Graduated Repayment – With this option, payments start low and will increase every two years. It’s a good option if you believe your income will gradually increase over the 10-year repayment window. Although your payments will slowly increase over time, no single payment will amount to more than three times greater than any other payment.

Although less common, income-based plans are also available. These plans factor in your annual gross income to determine a repayment schedule that takes no more than 25 years. Eligibility for these plans is determined by your level of income. To see if you qualify, visit the Federal Student Aid Web site.

The benefits of paying on time
Develop a solid repayment history, and some financial institutions may reward you with a reduced interest rate. Additionally, you may be able to reduce your rate if you sign up for automatic paycheck withdrawals to repay your student loans. You can also save money in interest over the long term if you put extra money toward your premium each month.

Is consolidation right for you?
Consolidating may seem like a good option if you have multiple loans or if you are paying high interest rates, however Cradduck stresses the importance of doing the math to see if it will actually save you money. “There’s more to consider than just the rate,” he says. “Review the fine print to make sure there are no fees that could offset any gain from lowering your rate.” For example, if you extend the term of your loan and end up making more payments, you may pay more over time, even if you lower your interest rate.

Fifth Third Bank understands the impact of an economic downturn on recent college graduates. Our financial professionals are always available to help answer your student loan and other financial questions. “Come talk to us,” Cradduck says. “We’ll help find the best financial solutions for you.”

To learn more about paying off student loans, contact Fifth Third at (866) 475-4201 or visit 53.com.

All loans subject to credit review and approval.