There comes a time in the life of most college students when they must face their worst nightmare: repaying their student loans.

Students enter repayment status when they drop below half-time enrollment, withdraw from school, or graduate. After a six-month grace period, the first loan bill becomes due.

Before this happens, it is best to be prepared.

“It is important that students contact and communicate with their lenders,” said Carol Hutaff, the director of loans at HPU’s Office of Financial Aid. Hutaff added that students should also ask about incentive programs that can reduce their loans. For example, setting up automatic payments from a bank account can reduce a loan by percentage points based on the banks policies. certain kinds of employment, such as teaching or law enforcement, can reduce loans substantially.

Five repayment options are available: The least expensive is the Level Repayment Plan which allows the borrower to pay the same amount every month for the duration of the loan.

The Graduated Payment Plan starts with low payments but they increase after four years. Repayment under this program must be within 10 years, and the total interest costs are higher with this option.

The Income-Sensitive Repayment Plan is available to Stafford and Parent Loans for Undergraduate Students (PLUS) borrowers. Under this plan, payments can be adjusted according to your income; however, the minimum payment must be enough to cover the interest. Repayment under this program is 10 years and may be extended to 15 years under special circumstances. Total interest will be higher with this option, and you are required to reapply annually.

The Extended Repayment Plan is available to recipients of the Federal Family Education Loan Program (FFELP). To qualify, your first federal loan must have been received on or after Oct. 7, 1998, and your total balance must exceed $30,000. This plan allows a repayment over 25 years.

The Federal Consolidation Loan plan is aimed at making payment easier for deeply indebted borrowers. Eligible loans are combined into one loan with a longer repayment term and lower monthly payments, sometimes by as much as 40 percent.

Students may also want to check with their lender for other options.

By choosing a plan that feels comfortable, you can make the transition from college to the work force much easier.

All Stafford and Supplemental Loans for Students (SLS) borrowers should be aware that federal regulations require them to have an exit interview before graduating or leaving school. In fact, you should consider talking to Hutaff before you leave HPU anyway. Even if it isn’t required, most students find it helpful. Call 544-0208 for an appointment.