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Michigan students graduate from college with a lot of debt.
In fact, 63% of those who completed four-year programs at state or private universities have debt, and the average amount owed is a whopping $30,852, according to data on the Class of 2016 from the Institute for College Access and Success.
While investing in your education is often a smart long-term move, it’s important to ensure you take out the right loans if you need them, and that you have the best plan for repayment after graduation.
Keep reading to learn about your choices for Michigan student loans, plus refinancing and consolidation options if you already have student debt.
Federal student loans
For most Michigan students, obtaining federal student loans is the best way to pay for your education. Federal student loans come with important borrower protections and provide help with repayment to those who need it.
For example, if you work in a qualifying public service job, it’s possible to erase some of your loan balance through Public Service Loan Forgiveness.
Or if your income is too low to cover the Standard Repayment Plan amount, you can hop on to an income-driven repayment (IDR) plan. These plans cap your payments and eventually offer loan forgiveness.
There are a few different federal student loan options to consider, including:
- Direct Subsidized Loans: Undergraduates who demonstrate financial need are eligible for these loans. The government pays your interest charges while you’re in school and during deferment and your grace period.
- Direct Unsubsidized Loans: Regardless of financial need, undergraduates and graduate students can qualify for Direct Unsubsidized Loans. You’re responsible for all interest charges on your unsubsidized loan.
- Direct PLUS Loans: These loans are available to parents and grad students. Unlike Direct Loans, your credit matters in determining whether you qualify for a loan. More specifically, you must not have an adverse credit history to qualify.
To apply for any federal loans, you’ll need to complete the Free Application for Federal Student Aid, also known as FAFSA.
Private student loans
Private student loans are another option for Michigan students.
You can typically borrow more money through private lenders than from the government. But private loans can be difficult to qualify for unless you have good credit and proof of income. Many students need cosigners to obtain private student loans.
You can find private loans from banks, online lenders, and credit unions. Some of these private student loan lenders make it easy to compare rates and terms.
Terms can vary from lender to lender — unlike with federal loans that have standard interest rates — so you’ll need to shop carefully for the right loan for your situation.
While private student loans don’t have all the borrower protections federal loans offer, most do allow you to put loans temporarily into forbearance if you face hardship that prevents you from paying for a period.
You can typically also defer payments on private student loans while in school and for a period after graduation.
Michigan student loans
Michigan doesn’t offer any state-specific loan programs. But the state does have resources available to help with loan repayment.
The MI Student Aid website links to loan repayment resources, as well as to the Michigan Guaranty Agency’s Ombudsman, which investigates complaints related to student loans.
The state also offers the Michigan Tuition Grant, valued at up to $2,000 per academic year. This grant is awarded to needy students attending Michigan nonprofit schools.
The state also offers other scholarships and grants, such as for students who were in foster care or whose parent was killed in the line of duty.
Finally, some loans may be available directly through specific Michigan schools. For example, Michigan State University offers short-term loans to eligible students.
Undergrads could borrow up to $450, graduate students could borrow a maximum of $800, and medical students could borrow up to $1,700. To borrow, students need to show that they could repay the loan within 60 days.
Refinancing or consolidating student loans
Both student loan consolidation and refinancing could help make your Michigan student loans more manageable in repayment. The two options, however, work differently.
The federal government allows you to consolidate eligible federal loans. Doing so combines multiple loans into one big loan. That could make loan repayment easier to manage. Consolidation could also make some loans eligible for IDR, which could lower your monthly payments.
But consolidation won’t lower your interest rate. Instead, the interest rate on your consolidated loan will be based on the weighted average of all the loans you combined, rounded up to the nearest one-eighth percent.
With refinancing, you can take out a new loan with better terms to repay your old debt. Your new loan may have a different repayment period and a lower interest rate than your old loans.
You can refinance both federal and private loans, but all refinancing is with private lenders — the federal government doesn’t have loan refinancing programs. This could mean giving up some borrower protections, such as access to IDR and loan forgiveness.
If refinancing is a good option for you, check out our list of top lenders to refinance student loans and compare interest rates, repayment periods, and other loan terms to find the best option for you.
Repaying Michigan student loans
Finding the right Michigan student loans and making smart choices about refinancing are both important to ensuring your educational debt is affordable.
You also want to explore opportunities for grants and scholarships while going to school so that you can borrow the minimum amount possible and begin your life after graduation with debt payments you can easily handle.
Need a student loan?Here are our top student loan lenders of 2019!
|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 2/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.26% – 13.26%1||Undergraduate and Graduate|
|4.20% – 11.44%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.62% – 11.47%*,4||Undergraduate and Graduate|
|4.38% – 13.38%5||Undergraduate and Graduate|
|5.85% – 6.99%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.47% – 12.34%8||Undergraduate, Graduate, and Parents|