The amount of student loan debt amassed by college graduates is estimated at a trillion dollars. It is an enormous amount of debt and paying it back, for many graduates, is intimidating and burdensome.
Six months after graduating or leaving school, student loan repayment obligations begin. Developing a strategy that will help manage the debt is crucial, if the debt is to be successfully repaid. Tuition.io is a program that offers free help with this.
Let’s look at strategies to successfully repay student loans
- Know what you owe. Students may carry debt from more than one loan servicer and these loans are often sold between them. Trying to identify who and how much is owed can be overwhelming.
- Select the most appropriate loan repayment plan under the circumstance. There are a variety of repayment plans available for federal student loan debt. They range from income based repayment plans to deferred payment and forbearance plans.
- Set up an automated deduction payment plan through your bank or credit union. It keeps you from spending the money on something else and you will never have a late or missed payment.
- Inquire about student loan forgiveness programs. Teachers are afforded significant debt relief in the form of principal reduction and complete forgiveness of debt, after 10 years of payments. There are also public service forgiveness programs for students who work in public service jobs that often pay lower salaries.
- Consolidate debt into a single manageable loan, often times with a lower interest rate. Depending on whether you have private or federal loans, a loan consolidation program may be the way to go.
- Make extra loan payments to be applied specifically to the loan’s principal amount. This will reduce the amount owed at a fast rate and reduce the amount of interest to be paid.
- Pay off loans with the highest interest rates first.
Putting together a repayment plan that is well organized, will make student loan debt more manageable and a goal that is able to be achieved.