If you have debt from student loans, you likely already know that it’s a long process to navigate, even with guidance. Many college graduates who took out loans are still paying them down a decade later, and it can certainly feel never-ending. However, with a little careful planning, discipline, and well-researched strategies, you can tackle your student loan debt with less stress.
Here are a few of our choice strategies when it comes to navigating your student loan payments:
Get a grasp on what you’ve borrowed.
As stated earlier, if you’ve been out of college several years, a lot has changed fiscally in both the U.S. and the world, so it’s a good idea to go over the terms of your loan to understand what you still owe, the interest rate on your loan as well as accrued interest, and the terms of repayment. You also need to understand whether you have deferments, grace periods on payment, and loan consolidation options. Knowledge is power, especially when it comes to knowledge on what you owe.
Work out a budget and stick to it.
Start by documenting your current income and expenses (i.e. rent/mortgage, utilities, car payments, etc), and from there, create a budget that includes your monthly student loan payments that you know is reasonable for your income and spending. It is also a good idea to review your budget from time to time in case your financial situation changes.
Prioritize high-interest loans, and look into refinancing.
It’s no secret that the higher your interest, the faster it accrues – thus, the loans with high interest rates are the ones you want to pay down first to save you big in the long run. When it comes to the option to refinance your student loans, there are pros and cons, including losing federal benefits (if you have federal student loans), so be sure to talk to a financial professional if you are considering that option.
Look into income-based repayment plans, as well as student loan forgiveness.
If you have a federal student loan, you may be able to take advantage of an income-based repayment plan that’s also based on your family’s size. Additionally, you may qualify for student loan forgiveness, depending on your profession.