There’s a lot of student loan advice out there, so it can be hard to know which tips to follow. While everyone’s situation may be different, there are certain tried-and-true strategies that can help you pay off your debt.
To gather the best tips and tricks, we reached out to experts for their student loan advice. From making in-school payments to refinancing for lower interest rates, here’s what the pros have to say about paying off your student loans:
1. Student loan advice starts with knowing your loan
2. Track down your loan servicers
3. Consider paying off the interest while you’re in school
4. Avoid borrowing more than you need
5. Understand your options for repayment
6. Sign up for automatic payments
7. Keep living like a student
8. Pursue jobs that could lead to loan forgiveness
9. Make debt payoff the focus (not your loan balance)
10. refinancing your student loans at lower rates
11. Don’t ignore financial problems
One of the first steps to take as a student or new grad facing student loan payments is to get organized. It’s crucial to track down the details of your loans, from how much you borrowed to what your interest rates are.
“The most important thing is to understand the full cost of a loan,” says Sabrina Manville, cofounder of Edmit, a company that helps families financially plan for college. “This includes, of course, the interest — but also any upfront origination fees, and when the interest actually starts accruing.”
Before anything else, make sure you understand the following about your student loans:
- How much you’ve borrowed or are planning to borrow
- Your interest rate, which could be fixed or variable, and how it will affect your cost of borrowing
- The issue date on your loan, and whether you’ll have to pay an upfront fee
- Your first payment date, and whether you have a grace period
- How many years your loan term runs for
Once you have this information, use a student loan calculator to estimate your monthly payments and see how much interest you’ll be charged. This will give you a clearer sense of how much you owe on a month-by-month basis.
The interest costs are worth paying special attention to, since they’re the part of the loan you can affect, whether by refinancing or repaying your debt early. Knowing how much you pay in interest might even get you motivated to make extra payments to save money over time.
When repayment starts, the last thing you want is to be caught unaware. So along with going over the details of your loans, make sure you know exactly who your loan servicers are.
Attorney Adam Minsky of Boston Student Loan Lawyer sums up this advice on student loans best: “Figure out exactly what student loans you have and who is servicing them. … Make sure all of your loan servicers have updated contact info for you.”
If you have federal student loans, this is easy: You can find out which of the nine federal student loan servicers has your account by signing into your Federal Student Aid account.
For private student loans, meanwhile, call your lender (whether it’s a bank, credit union or online provider) for detailed information on your server. And if you’re not sure who the lender is, check your credit report via AnnualCreditReport.com — their name and info will be on there.
Finally, make sure to keep in touch with the servicer. If you’re moving or switching from a college email address to a personal one, share these details with them. Otherwise, you could run the risk of missing a payment simply because you never received correspondence about it.
Most student loans come with a grace period, meaning you don’t have to make payments until six months after you leave school. But if you can swing small or interest-only payments as a student, you could cut down on loan costs.
Brian Meiggs, founder of personal finance site My Millennial Guide, was able to pay off his student loans ahead of schedule, partly because he made payments while in school. That’s why his advice for student loans includes getting a jump on repayment.
“If you do not have subsidized federal students, in which the government pays the accrued interest while you are in school, your student loans will accumulate interest the whole time you are taking classes,” says Meiggs.
“This is the case for unsubsidized federal student loans and private student loans. If you don’t make any payments during college, you will already owe thousands of more dollars than you took out in the first place once you graduate,” he says.
If you can cut away the interest while you’re in school, perhaps with income from a part-time job or work-study position, you can lower the cost of your loan. Plus, you can minimize the effects of “interest capitalization” (having your loan balance grow because unpaid interest is added).
“By making a few small payments a month, or even when you can, you can help ease the burden you will inevitably feel once you are required to start paying off your student loans,” says Meiggs. “Make a small sacrifice now to help yourself out in a big way in the future.”
If you haven’t taken out student loans yet, be very careful about how much you borrow. A large portion of the 45 million Americans who owe student loans (to the tune of $1.71 trillion) probably wish they could turn back time and take out less debt.
“While student loans can be a large source of financing for college, planning for cost and taking only the amount needed will help to avoid being overly saddled with unneeded debt,” says Robert Farrington, the money expert behind The College Investor.
Remember, even if you’re offered a certain amount of student loans in your financial aid award letter, you’re not obligated to take the full amount. Instead, estimate your cost of attendance, and consider defraying costs with a part-time job or side hustle. By keeping borrowing to a minimum, you’ll be out of debt sooner.
Part of your process should also include researching and understanding your student loan repayment options.
With federal loans, you have access to the standard 10-year plan, income-driven plans, extended repayment and others. This flexibility can be really helpful if your income is limited and you need to lower monthly payments.
Liz Stapleton, who runs the finance blog Less Debt More Wine, has this student loan debt advice: “The repayment plan you choose now does not have to be the repayment plan for the entire life of the loan. As your financial situation changes, so can your repayment plan, and it can be changed up to once a year.”
Private student loans don’t usually have as many options, but some lenders do offer deferment or forbearance if you run into financial hardship or go back to school. If you’re looking to adjust monthly payments, speak with your lender about what you can do.
Did you know that some financial institutions offer a discount on interest when you sign up to pay your loans automatically?
“Contact the student loan issuer and ask about all of the available options,” says Taylor Schulte, a certified financial planner and founder of Define Financial.
With a simple phone call to the bank, Schulte’s family was able to lower the monthly interest rate on their loan.
“To our surprise, just by signing up for monthly autopay we lowered our rate by 0.25%,” Schulte says. “Pick up the phone and start asking questions — you might be surprised [by] what you learn.”
Not only could autopay save you on interest, but it will also help you avoid missing a payment. You can “set it and forget it” — your loan repayment runs on autopilot, so you won’t have to manually pay your bills each month.
After graduating, it’s easy to start spending more money. You need professional clothing for interviews and furniture for your new place, right? It’s tempting, but do your best to avoid “lifestyle creep” during the early years after graduation.
“Keep living like a college student,” advises financial coach Whitney Hansen. “Even if you get a great job right out of college, continue living on your college student budget, and put all the extra income towards your debt. Your future self will thank you.”
Even as your income increases, avoid the temptation of lifestyle inflation. By sticking with a budget, you can repay your loans sooner and start enjoying that extra money without the uncomfortable feeling of debt breathing down your neck.
As you begin the job hunt, “research loan forgiveness plans to see if they exist in your field,” says Elizabeth Colegrove, who runs the real-estate investment site Reluctant Landlord. “Make sure you review [available student-loan forgiveness options] when considering positions.”
The Public Service Loan Forgiveness program, for instance, can wipe away your college debt after 10 years of working in a nonprofit, government agency or other qualifying workplace. Other professions — such as teacher, lawyer and doctor — can also sometimes qualify for loan forgiveness or repayment assistance.
At the same time, you can seek out jobs that offer loan payment plans as part of their employee benefits package.
“This can be worth a lot of money, so a lower-paying job might really be higher when considering this benefit,” Colegrove says.
You might be overwhelmed at the amount of money you have to pay back. This can be discouraging for anyone who’s just starting out in the workforce and still getting a footing in the world.
Lindsay VanSomeren, finance blogger at Science Finance, shares her best student loan advice on this problem: “Don’t focus on the huge balance; it’s overwhelming. Make debt payoff a priority, but focus on tackling small chunks at a time — $1,000 increments or so. Each small chunk is mentally easier to deal with, and they do add up.”
Two tried-and-true strategies for student loan repayment are the debt snowball and debt avalanche methods.
With the debt snowball approach, you focus on closing out the loan with the smallest balance first, directing any extra payments to that debt. The sooner one of your loans drops off the list, the more you might feel more motivated to keep going.
The debt avalanche method has you target loans with the highest interest rate first, so if all other things are equal, it would save you more than other methods. But at the same time, you might not get the same boost if you’re slowly chipping away at a high-interest loan with a huge balance.
Consider trying both strategies of debt repayment to see which one’s more effective for you. And remember, making extra payments is key to seeing rapid progress on your repayment.
Once you have a decent credit score and income — or can apply with a cosigner who does — you might qualify for student loan refinancing. Through refinancing, you can restructure your debt, adjust your terms and maybe score a lower interest rate as well.
But the benefits of refinancing aren’t for everyone, especially if you’re relying on federal protections.
“Once you refinance federal loans, you permanently lose access to the various federal aid programs, such as income-driven repayment plans and Public Service Loan Forgiveness,” warns Stephen Caplan, financial advisor at Neponset Valley Financial Partners.
So before applying for refinancing, first learn about all the pros and cons of this move.
“I have seen way too many borrowers jump at the first chance to lower the interest rate on their student loans without carefully weighing their options and considering the consequences,” Caplan says. “Make sure you do a thorough analysis before refinancing your federal loans through a private lender.”
If you don’t need those federal programs, however, refinancing could be a savvy way to adjust your monthly payments and save money on interest.
The final piece of student loan debt advice may seem obvious, but it’s an easy trap to fall into: Don’t default on your student loans if you can possibly avoid it. If you’re struggling to make payments, contact your loan servicer right away.
You might be able to pause payments temporarily so your loans don’t become delinquent or go into default. Defaulting on debt will likely just make a bad situation worse, as it can destroy your credit score, and in the case of federal loans, lead to wage garnishment.
Ignoring student loan problems won’t make them go away, so be proactive about dealing with your debt. Even though getting on top of your student loans might take time, applying this tried-and-tested student loan advice from experts could help you come out on top and maybe even pay off your student loans faster.
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