Crushing Student Debt Can Be Beat
Helpful tips on how to pay off student loan debt.
Managing student loan debt can be overbearing at times, but there is help out there for those who need it! An increasing amount of college students graduate with thousands of dollars in student loan debt. For those who have just graduated, or have their student loans placed in default, there are viable options out there to pay off the loans and gain back financial independence.
Repay Student Loan Debt Affordably
Before choosing a payment plan, create a solid monthly budget to help manage your finances. Then, consult a financial specialist to help select the bestsuited plan for your personal budget and financial goals.
1. Pay Lower Monthly Payments
Many borrowers choose to pay a lower amount on their monthly payments in order to save more money and secure a financial safety net. However, by doing so, the loan takes longer to pay off and more interest is accumulated over time. This pushes back the loan and costs more money in the long run.
2. Climb out of Debt with the Graduated Payment Plan
Just as it sounds, the Graduated Payment Plan increases the monthly payment steadily over the years. This helps borrowers to have a little bit of a “grace period” paying off smaller amounts of debt as fresh graduated students. This payment is perfect for those who are serious about budgeting and working hard for advancement in their careers. With this plan, the loan’s interest is also cut back significantly. Keep in mind that every year the monthly payment is only going to increase, so be prepared to be spending larger and larger amounts of money.
3. Public Service Loan Forgiveness Program
This program is a great way to reduce large sums of student loan debt. To be eligible for Public Service Loan Forgiveness, there are a few requirements that must be met. First, the loans that you are trying to have forgiven must be federal. This program will not release any private loans you are on your own for that! Second, you must be a government or nonprofit service member for a minimum of 10 years. In the meantime, timely payments must be made on the loans. However, this program will forgive the remaining amount that is not paid back within the 10 years of service.
How to get Loans Out of Default
If you have loans that have been placed into default, there is still hope to fix them! You may “rehabilitate” your defaulted loans through a monthly repayment plan. In order to have the default taken off of your credit score, you need to make all of your monthly payments on time for 9 consecutive months. On the other hand, there is the option of loan consolidation. In this case, the loan comes off default immediately but the effects of the default will stay on your credit score.
There is hope out there for repaying student loans. When seeking help, it is important to do your research, but also to seek a professional financial advisor to help devise the perfect plan that suits your financial needs.
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