For college students who graduated or otherwise left college with student loan debt after the spring 2016 semester, bills are starting to come in. For those students, the six month grace period before they are required to pay back loans concluded in November or December.  

While about 37 million U.S. citizens owe more than a collective $1 trillion in student loans, according to the Federal Reserve, students have options that can keep student loan debt from becoming an albatros, said Briget Jans, executive director of Scholarships and Financial Aid at the University of Houston.

The first step is for recent graduates is to visit www.nslds.ed.gov to look at the reality of how much the borrower owes and determine which repayment plan is the best fit, Jans said. Knowing the options available is key, she said.

“People get scared when they realize how much they owe, and they have a tendency to do this ostrich thing where they put their head in the sand and kind of ignore it,” Jans said. “And that leads them to not seek out the help they need.”

Jans met with Community Impact Newspaper to provide insight on tackling student loan debt.  

Community Impact: How should a person decide which student loan repayment plan is best for them?

Briget Jans: The plans available to a person depend on when they borrowed their loan. When Congress decides to make a change to payment plans, they don’t make it retroactive to people who are already in repayment or people who’ve already borrowed loans. It’s always for a future date. Every few years something changes and not everyone qualifies.

CI: What options are available for people who financed a significant amount of debt for school?

BJ: For students who have a substantial amount of debt, one thing to consider is a consolidation loan that allows them to pull everything together. When it comes to loan consolidation, however, I do recommend that people not consolidate while they have time in their [initial 6-month] grace period. You want to wait until the last month of your grace period because loan consolidation does not come with any grace period. Consolidation is [when] they take the weighted average of the loans to determine the [new] interest rate, but if most of your loans are at around the same interest rate it won’t have that much of an effect.

CI: Under what circumstances should a person take the lowest repayment option?

BJ: The good thing to do every year is reevaluate. Do you need to stay in that lowest price payment option or move to a standard repayment? If you’re not paying the principle on the loan that’s probably the most dangerous part of student loan repayment. You could be paying for five years and not see that loan balance go down. If you’re in the lowest repayment option, be mindful of what that means. That’s where you hear the horror students about a person who got an undergraduate degree and now they owe $200,000. It’s because they went years without touching the principle and it just added interest on interest on interest.

CI: How likely is it that congress come up with a student loan forgiveness plan that limits the burden of the debt?

BJ: If they were to come up with a plan that says "you pay for 15 years and anything after that is forgiven," that would be for new borrowers. They don’t apply that stuff retroactively. If somebody has already borrowed loans, they’re locked into what they borrowed and they need to move forward with the plans that are available to them. There’s a possibility, I suppose; who knows? Congress could decide to make it retroactive, but historically, it’s not what they do. Really, they give almost a full year before the law goes into effect. They aren’t likely to do something to affect people in repayment now. The political climate is more important for those coming into school. I wouldn’t expect to be bailed out on it.

CI: Are there loan forgiveness programs for people who work in the private sector?

BJ: Currently there are some loan forgiveness programs, where if you pay for 20 years, anything after that you don’t have to continue to pay. The thing to consider with that is, anything that you don’t pay, you have to claim as income in that one year. Say someone has $40,000 in income and they’ve only been paying the minimum amount on their loan, leaving a balance of $50,000. Suddenly they have to claim that additional $50,000 of income, and unless they are able to pay the taxes on that, that burden is going to hit them too.