If you’re just entering the job market after college, you’re probably trying to figure out how you’re going to pay off your student loan debt. While it may seem like an impossible mountain to climb, you can make it happen with discipline and dedication to paying off your debt in full. These eight tips on maintaining your student loan debt will help you accomplish this feat in no time.
1. Consolidate Multiple Loans Into One
As per the experts at SoFi, “Student loan refinancing is when you get a new loan at a new interest rate and/or a new term.” Refinancing is an option for student loan holders looking to consolidate their debt and achieve a lower interest rate. When you refinance student loans, you get a lower interest rate. Many lenders offer to refinance programs to make your monthly payments more manageable, especially if you have multiple loans.
2. Take Advantage of Prepayment Plans
If you can afford it, prepaying your loans can save you money in interest. That’s because your monthly payments are applied to older principal balances first. So if you pay off a loan early, you won’t have to make as many future payments.
3. Switch to an Income-Driven Repayment Plan
Income-driven repayment plans reduce your monthly student loan payment by capping your monthly payment at a certain percentage of your income. This can be an excellent way to get out from under student debt while keeping payments affordable, but it’s important to understand that you may end up paying more in interest over time.
4. Calculate Loan Forgiveness
You may be eligible for a loan forgiveness program depending on your situation. These programs allow borrowers who work in public service jobs or teach at certain schools to have their remaining loan balances forgiven after 10-25 years of payments.
5. Determine if You Are Eligible for Federal Forgiveness Programs
There are two federal loan forgiveness programs that make it possible for you to have your student loans forgiven after 10 or 20 years of payments. The Public Service Loan Forgiveness Program (PSLF) is available to people who work in public service jobs and sign up for an income-driven repayment plan. At the same time, teachers can get their loans forgiven through Teacher Loan Forgiveness.
6. Get Involved in A Revolving Fund
If you’re experiencing difficulty making your student loan payments, consider applying for a revolving fund. The money from these funds is typically used for emergency expenses and can make it easier to keep up with your payments.
7. Consider Forbearance and Deferment Options
Forbearance is a period of time when your lender doesn’t require you to make payments, but interest will continue to accrue. Deferment allows you to stop making payments for an extended period while keeping your loan in good standing and avoiding defaulting.
8. Seek Help From Your Lender
Lenders have entire departments dedicated to helping customers who have trouble paying back their loans. So if you can’t make your payments, call your lender and tell them you want help.
In addition to federal loans, private loans are also widespread among college students and graduates today. If you’re a government employee or nonprofit worker, there’s a good chance that your student loan will be forgiven after ten years of service. However, if you work in a for-profit company, it’s unlikely that your loans will ever be forgiven.