Drowning in student loan debt? How to come out on top

Are you drowning in student loan debt? The schooling you took to make you more money can feel like it is draining all that money right back out. College is not cheap, at least here in the US. It’s also getting harder to get a well-paying job if you don’t have that degree.
 
I put myself through college using a combination of federal loans and grants. And I do make more money now, but I am definitely carrying a heavy load of debt.

The steps to freedom from student loan debt

There are a LOT of things you can do to ease the burden of student loan debt. I have done all the ideas below and found them crazy helpful.

1. Know how much student loan debt you have

Some options depend on how much student loan debt you have. Knowing your true number can feel scary but it is critical to getting those bills down.

2. Research student loan debt options with your servicer

Your servicer is the company managing your account. If you have loans at different servicers, it is worth your time to transfer them all to one place. There are requirements on federal loans to list out all your payment options and ways to reduce debt.

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3. Reduce interest on your student loan debt

When looking at the options available, the first thing to check is ways to reduce your interest rate. I set up auto-pay and saved myself .25%. Now it may not seem like a lot, but over time it adds up. Any actions you can take to reduce your interest rate, DO IT. Your servicer will have a list.

4. Research repayment plans

If you have federal loans there are many different repayment options. Some base your payment on income, some on extending the repayment time frame. Many servicers give you tools to determine which repayment plan is right for you.
 
Remember whenever you lower your payment, you end up paying more of the life of the loan. The interest raises the total amount you end up repaying. If you can swing it, pay your loan off fast to save money. If you can’t, make sure you get the payment to an amount you can actually pay. This way your credit score doesn’t go down due to missed payments.
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5. Consider consolidation of your student loan debt

Sometimes you have more options if you merge separate loans together. It is worth getting a quote on what a consolidation would save you. Contact your servicer for details.

6. Student loan debt forgiveness

If you work for a qualified company you can earn forgiveness for a portion of your student loan debt. For example, I work for a non-profit healthcare company and after 10 years of working there and making on-time payments, the rest of my debt is forgiven forever. Woot! It’s totally legit and something to look into if you can. I mean, why not?

If you really can’t pay anything on your student loan debt

Sometimes you can’t pay anything towards your debt. The best thing you can do is contact your servicer.  All federal loan programs require servicers to inform you of all their options. You may be able to get a deferment or forbearance. These options suspend your responsibility for payments for a certain period of time.

Just remember you have options

The worst thing you can do is stick your head in the sand and do nothing. Talk to your bank, your servicer or any other business holding your loans. Your servicer wants their money back. It is in their best interest to work with you to recoup whatever money they can and they know it.

You can do this!

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