Graduating from Harvard University has hopefully opened a lot of doors for your career — but going to one of the most prestigious schools in the country likely came with a steep cost.
A single year at Harvard can cost up to $73,600. Even if you managed to secure scholarships for your education, you may still have graduated with a hefty student loan balance hanging over your head.
Thinking about your Harvard student loans and monthly payments may be overwhelming, but ignoring your debt will only land you in trouble. Here are four steps you need to take now to start managing your loans.
1. Find out what loans you have
Over the course of your college career, you may have taken out multiple student loans to pay for your education. Each loan type has different terms, grace periods, and interest rates, so it can quickly become confusing.
Your first step to managing your debt is identifying the types of loans you have. If you aren’t sure, you have a few options for getting that information:
- Contact Harvard’s financial aid office
- Search on the National Student Loan Data System
- Check your free credit report at AnnualCreditReport.com to see all the accounts in your name
As a Harvard graduate, you may have one or more of the following loan types:
Federal Perkins Loans
A Federal Perkins Loan has a low fixed interest rate of 5% and borrowers have a nine-month grace period before they have to repay their loans. That means if you graduated in May, you don’t need to make your first student loan payment until February 2018.
As of September, 2017, the Federal Perkins Loan program came to an end. However, if you took out a Perkins Loan previously, the terms of your loan stay the same.
Harvard offers different institutional loans based on your major and grade level. These loans have a six-month grace period and the loans are subsidized, which means Harvard covers the interest payments until you graduate.
Depending on your major and personal situation, you may have taken out a Health Professions Student Loan or a Loan for Disadvantaged Students (HPSL/LDS). These loans have an interest rate of 5% and give you a 12-month grace period, which allows you more time to find a job.
Wolfson Loans have variable interest rates, but Harvard caps them at 7%. If you have this type of loan, you have a six-month grace period.
Private student loans
If you exhausted your Harvard loan and federal student loan options, you might have turned to private lenders to fill the gap. Your private loan terms can vary; you may have higher interest rates or less favorable repayment plans.
2. Know your student loan repayment options
If your loans were issued by Harvard University, the federal government, or a private lender, there may be options available to you to make managing your payments easier.
Income-driven repayment plans
Harvard University has one of the highest rates of students securing jobs after graduation. Over 66 percent will enter the workforce, while another 14 percent will go on to graduate school.
However, 31 percent of 2016 Harvard graduates start their careers making less than $50,000, and nearly 10 percent earn less than $30,000. If you’re carrying student loan debt, your payments can consume a good portion of your limited income.
If you’re having trouble making your payments and have federal student loans, you may be eligible for an income-driven repayment (IDR) plan. Under IDR, the government extends your repayment term and caps your payments at a percentage of your income. That approach can dramatically reduce your monthly loan payments.
If you’re struggling to manage different student loans and payment due dates, consolidating may be a good option for you. With a Direct Consolidation Loan, you combine your student debt into one loan with just one monthly payment.
Keep in mind, this option doesn’t save you any money. Rather, it simplifies the loan repayment process and is sometimes required to be eligible for other federal repayment and forgiveness programs.
Harvard Institutional Loans are private loans and are not eligible for a Direct Consolidation Loan, but Federal Perkins, HPSL, LDS, and Federal Stafford loans are. To apply for a consolidation loan, you can go directly through the U.S. Department of Education or sign up for our free app and get customized help with your loans.
If you need to pause payments on your federal or Harvard-issued loans for a qualifying reason, such as attending graduate or professional school, you can opt to enter your loans into deferment. With deferment, your student loan payments are paused for a set period of time (though interest may continue to accrue, depending on your loan type).
To apply for deferment on Perkins Loans, HPSL/LDS loans, or Harvard loans, complete the school’s request form. To defer federal loans, contact your loan servicer.
If you have private loans, you may still be able to defer your loans if you’re going back to school or are facing serious financial hardship, but rules vary by lender. Contact your loan servicer directly to see if a deferment is an option for you.
3. Research forgiveness and repayment assistance programs
Each year, over 900 students graduate from Harvard’s Graduate School of Education. Many of those students go on to teach in urban schools or high-need areas.
Eligible teachers could have a percentage of their Perkins Loans discharged after one year of service. To qualify, submit the teacher cancellation form to the Harvard Student Loan Office. The school gives extra consideration to special education teachers and those who teach in low-income schools.
Teachers with other types of federal loans may also have a portion of their debt forgiven after teaching for five years.
Public Service Loan Forgiveness
If you have a Perkins Loan, you might be able to get a percentage of your student loans forgiven if you complete at least one year of qualifying public service. Eligible professions include nurse, medical technician, child or family service professional, law enforcement, lawyer, firefighter, or librarian.
To qualify, you must submit a public service cancellation form to the Harvard Student Loan Office and be current on your payments. At the end of your service year, you must submit another form stating that you completed your service term.
Harvard grads with other types of federal loans may also be eligible for forgiveness if they work in a public service job for 10 years.
Harvard Kennedy School Loan Repayment Assistance Program
For graduates who are dedicating their careers to public service, Harvard provides its own form of aid.
If you work for a non-profit with a mission consistent with the goals of the Kennedy School, Harvard may pay a portion of your student loan payments for up to five years. To be eligible, you must make under $70,000 if you’re single or $90,000 if married.
Harvard Law School’s Low Income Protection Plan
Getting a law degree from Harvard can be prohibitively expensive, but the school’s Low Income Protection Plan offers some relief for law graduates with student loans.
If you work for the government, a non-profit, a private firm, or as an academic, you could be eligible. Under the Low Income Protection Plan, the school sets your loan payments at a fraction of your income (Harvard covers the rest of your bill).
4. Consider refinancing your loans
Graduating from Harvard has plenty of advantages. Nationally, 2016 graduates make an average salary of $50,566. Harvard graduates make much more — 53 percent of the 2016 class makes over $70,000, with many earning incomes in the six-figures. That means you’re likely an ideal candidate for refinancing both federal and private loans.
If other repayment options aren’t useful to you, refinancing your student loans can be a smart move. When you refinance, you work with a private lender to take out a new loan that pays off your current student debt. Your new loan may have a lower interest rate, smaller monthly payment, or different repayment term.
Refinancing can help you save money over time. With a lower interest rate, more of your payments go towards the principal rather than interest. If you need breathing room in your budget, extending your repayment term can lower your monthly payment.
However, refinancing isn’t a good idea for everyone. Be sure you weigh the drawbacks of student loan refinancing, too.
Tackling your Harvard student loans
Attending and graduating from Harvard is a tremendous achievement, but leaving school with student loan debt can inhibit your future plans.
Harvard offers many repayment options and cancellation programs to help you manage your debt more effectively. To find out what options are available for your specific needs, contact the Harvard financial aid office.
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