6 Ways to Manage Your Student Loan Debt

Most college graduates have one thing in common—student loan debt. If you didn’t enter school with a robust education account or a slew of scholarships, you probably fall into this category. According to Debt.org, 70% of college graduates left school owing money in 2016 with an average loan total of over $37,000.

Those statistics are staggering! If you find yourself with some student debt, we know it can feel overwhelming. But, as they say, knowledge is power. All you need are some guidelines and tips to help you take control and give you the power to keep your student loan debt under control.

1. Know the particulars of your loans

   In addition to the lender, loan balance and repayment status, it’s important to know the specifics of your loan. How much are the late charges? Does your lender offer payment forgiveness? If you can’t find any loan documents or statements, ask your lender or check with the National Student Loan Data System for Students to access all the pertinent information for your federal loans. Not only will having all of the particulars for your loan help you know how to make a plan of attack, but it will give you some major peace of mind. Student loans can be overwhelming and confusing, so taking the time to have all of the details figured out will do wonders for helping you feel calm and in control.
    

2. Be aware of the grace period

   The grace period is the time you can wait after leaving school before your first payment is due. It’s usually six to nine months for federal loans, with some loans including a deferment option. Private loan grace periods vary, so check with your lender. You don’t want to miss your first payment, so make sure you’re staying on top of things and you know when that grace period is up so that you can be prepared.
    

3. Revisit your repayment plan

   When it comes to federal loans, if the repayment plan isn’t working, it’s good to know that you have options and that you can always try something else. Contact your lender to get the details on what all of your options are. Some of the possibilities may include income-based repayment (IBR) or income-contingent repayment (ICR) plans. Most private loans don’t offer the luxury of changing your repayment plan, but they may work with you to lower your payments somehow—such as paying interest-only payments for a short time. Take some time to see what other options might be available for you and see what you can do about adjusting your payment plan to better fit your needs.
    

4. Keep your lender on your friend list

   Stay in touch—notify your lender right away if you move, change your phone number or email address. This is something that you will definitely want to prioritize. Make it easy for your lender to get in touch with you so that if there are any issues, they can be quickly resolved and you can move forward. If there’s an issue with your loan or your payment and they can’t contact you, you may end up paying for it with fees or late charges. Or worse—you default on the loan. Don’t ignore their attempts to contact you. Commit to the terms of your contract to avoid long-term consequences.
    

5. Pay extra if you’re able

   Just like a mortgage or any other loan, adding a little bit extra to each monthly payment can drastically reduce the length of your loan as well as the interest you pay. Take a hard look at your budget and see where you might be able to cut back each month to add to your student loan payment. You will definitely thank yourself in the long run for taking the time to put a little extra in. (insert name) of Mountain America Credit Union says, “Assess your budget and see where adjustments can be made to aggressively pay off your student loans. The faster you’re able to pay off your loans, the more your credit score will climb, which will open doors for you financially to help you move forward.”

    

   If you can’t swing it every month, do it when you can. Every little bit helps! Be sure to contact your lender (or look them up online) to see if they have specific instructions on making extra payments. They may require written notification for how you want the extra money applied, so before you jump into anything, look at the fine print and make sure it’s something that works with your loan.
    

6. Pay off your most expensive loans first

   Depending on your different student loans, you may have different interest rates. If you’re considering paying off one or more loans, pay the one with the highest interest rate first. You’ll be happy to get that off your plate, then you can turn your attention to some of your other loans with lower interest rates.

Other things to consider?

When it comes to student loans, there are just a few other things you should take into consideration. One is loan consolidation. This is the ability to move multiple student loans into a single monthly payment with one fixed interest rate. Do some research to see what the pros and cons of consolidation loans are and shop around. Something else to think about is loan forgiveness. This is where all or some of your loans could be forgiven if you work in a particular field or for a particular type of employer. Government, non-profit and education are just a few of the fields that offer this option. Take some time to see if this is something you might qualify for- it could make a significant difference for your loan payoff process!

Not all of these tips may work for you, but there is certainly some peace of mind that comes with knowing that there are options if you’re having a difficult time making your student loan payments. One thing to keep in mind: to do nothing and hope for the best will surely hurt your credit worthiness in the long run. Be proactive about your student loan payments and you’re sure to come out on top!