It’s never too late to get started on tackling student loan debt. It may seem overwhelming, but know you’re not alone. Here are six tips to get you started on your repayment journey.
Gather your loans
You may have taken out several different loans over the course of your college experience. Make sure to gather all of the information on each of those loans and set a repayment plan. Pay off the ones with highest interest rates first.
Create a budget
Make sure your budget includes your student loan debt. Creating a payment plan without considering how it affects your day-to-day spending is a recipe for failure. We should all be working off of some sort of budget by now to get us toward financial freedom, so once you know what your payments are going to be, incorporate them wisely and stick to the plan. This may mean trimming other extracurricular expenses to get you ahead.
Make payments during your grace/forbearance periods
If you’re fresh out of school, you’ve got a few months reprieve before this bill actually starts kicking in. Use this time to get acclimated with your loan details and even start paying some of the principal down or, at least, the interest that’s accruing at this time. If you’re all the way deep and have opted for forbearance or other deferments to give you some breathing room on payments, look toward making interest-only payments to avoid what might have been a $20K loan from growing to $40K or higher.
Deduct student loan interest
It’s tax time and, while it may not seem like much, you can reduce your taxable income based on student loan interest you paid for the year. It won’t help you buy a house, but at least you’ll get a bit of a break on the added interest payments.
Refinance your student loans
This is a great option if you multiple loans with multiple payments. Consolidate all of your existing student loans into one loan for a lower interest rate and lower monthly payments.
Yes, volunteering can actually get you on the right financial track. Various nonprofits organizations like AmeriCorps, VISTA (Volunteers In Service To America), Peace Corps and Teach for America offer some type of student loan forgiveness or reimbursements for volunteer service.
Explore other student loan forgiveness options
Find a job that offers student loan repayments or, even better, that is eligible for student loan forgiveness. They are typically nonprofits or local government jobs — such as teaching, law enforcement, and medicine — that offer loan forgiveness after 10 years of consecutive payments.
Just make sure to be aware of all the requirements and loopholes. Of the more than 19,000 borrowers submitted loan public service loan forgiveness applications — only 55 were actually granted.