Student loans can be a huge financial burden. If you are looking for new ways to get out from under your education debt, try employing one or more of the following tips.
1. Know Who You Owe
If you have multiple student loans, it may be easy to get confused about who you owe, loan amounts, and payment schedules. Make a list of everyone you owe money to, making note of important loan details. If you have federal loans, you can get a centralized and integrated view of your Title IV loans and grants by visiting the National Student Loan Data System. This list will help you avoid defaulting accidentally and paying any more than you have to.
2. Explore Repayment Options
The amount of principal and interest you’ll pay over time for federal student loans is dependent on the repayment program you select. The five most commonly used repayment programs include the standard loan repayment plan, the extended repayment option, the graduated repayment program, the income-contingent repayment plan, and the income-based repayment plan. You can explore all of these options and the impact they will have on your finances using the free student loan repayment calculators found on Student Aid on the Web.
3. Stick to Your Payment Schedule
You should make every effort to not only make your payments, but pay them on time. If you default or pay late, you may be subject to additional fees and interest. Applying extra money to your student loans whenever you can is also a good idea.
4. Consolidate Your Loans
Consolidating all of your student loans into one loan offers several advantages. First, you will only have one monthly payment, which may make it easier to manage your debt. Second, you can choose a new repayment option and may even qualify for renewed deferment benefit. Finally, there is also a chance of reducing your overall monthly payment.
5. Sign Up for Electronic Debiting
If you sign up for electronic debiting, you may be able to slightly lower the interest rate you pay on your student loans. Your payment will be automatically debited from your designated account each month, ensuring you will never be late again. Not every lender offers this discount, but it is worth inquiring about.
6. Deduct Your Interest
You can deduct up to $2,500 per year in interest on any loans used for higher education if you meet the income requirements set forth by the IRS. The money you save in taxes could be used to pay off a portion of your student loans.
7. Utilize the Teacher Loan Forgiveness Program
If you teach for five years in a school that meets certain qualifications, you may be eligible for the Teacher Loan Forgiveness Program. This program will forgive up to $17,500 in on FFEL and/or Direct Loan program loans.
8. Utilize the Public Service Loan Forgiveness Program
If you are employed full time by certain public service employers, you may be eligible to take advantage of the Public Service Loan Forgiveness Program. This program will wipe away the remaining balance due on your eligible federal student loans if you have made at least 120 payments under the Direct Loan Program.
9. Work for a Government Agency
The government’s Federal Student Loan Repayment Program allows the federal agency that employs you to pay up to $10,000 toward your student loans each calendar year, up to a maximum of $60,000. To take advantage of this program, you must sign an agreement saying that you will remain in the service of the paying agency for at least three years.
10. Find Extra Money for Your Loans
Your student loans will get paid off faster and you will pay less interest if you find extra money to throw at your debts. You could get a second job or take advantage of additional income streams from sites like Upromise or BabyMint.
Guest post from Bailey Harris. Bailey writes for Homeownersinsurance.org and other finance-related sites.