6 Tips to Tame Your Student Debt For Class of 2018
Out of College and Time To Handle Student Loans
Paying off student loans is never fun. Although school is expensive, there’s almost no chance you won’t have to take out some form of a loan to get you through your program. However, once you’ve graduated, you’ll probably have some sort of debt you’re going to need to start repaying. Below, are a few tips you can use to tame your student debt and prevent it from ruining your finances.
1. Understand Your Loans and Grace Period
In order to keep your debt under control, it’s important that you keep track of your balance, lender, and repayment statuses of your student loan accounts. Understanding your loan and grace period can help give yourself more options for loan repayment. However, if you’re unsure of what these things are, you can always contact your lender for more information. Also, logging into your repayment account can let you see your repayment amount, repayment status, and lender you’re paying for federal loans. If you come across loans that aren’t listed, they’re most likely private, or nonfederal loans. To get more information on those, you’ll need to view your original paperwork or contact your school.
There’s no surprise knowing that different loans come with different grace periods. A grace period, if you’re unsure what the term means, it how long you have until you need to make your first repayment. Usually, it’s six months for federal Stafford loans and nine months for federal Perkins loans. You also usually have six months for federal PLUS loans. However, grace periods for private students differ, so always contact your lender to get the right information. Even missing a single payment can get you off track.
2. Choose the Right Repayment Option
When it’s time to start paying your federal student loans, your repayments will be based on a 10-year repayment plan. However, if this repayment plan is too hard for you to be on, there are options available. Increasing your repayment plan past the 10-year period can help you lower your monthly repayments, but you’ll have to pay off more interest. You can also choose income-based repayment plans that estimate your monthly repayments based on your annual income. After paying for 10 years, you may be available for forgiveness, but this depends on a wide range of factors.
Keep in mind that private loans are not IBR eligible, as well as other federal loan repayment plans, forbearance, or forgiveness plans. Although, your lender may offer a form of forbearance for a fee. However, before you agree on anything, make sure you read the paperwork and compare the repayment options available to you.
3. Obtain a Title Loan
To pay off your student loan debt, consider getting a title loan. This involves using car title as collateral to get a new loan. This is a great option if you know you will not be able to make your loan payment on your own without a little help. Just make sure to get the best Texas title loans possible.
4. Do Not Default on Your Loans
The absolute worst thing you can do when it comes to student loans is to ignore them. If you are unable to make your monthly payments, talk to your lender and try to work out a manageable arrangement. If you do not and you fail to pay, your account may become delinquent and default. Federal loans default after nine consecutive months on not paying. Private loans can default even faster. If your loan defaults, you will immediately owe the whole balance, your credit score will drop, and the government can garnish your wages and tax refund.
5. Loan Forgiveness Programs
If you get a job in specific fields or work for certain types of employers, you may be eligible for a federal student loan forgiveness program. Those who work in nonprofit, government, and other public service jobs may be able to take advantage of Public Service Loan Forgiveness. This is a federal program that forgives any student loan debt after 10 years of making qualified payments. There are other student loan forgiveness programs for PeaceCorps volunteers, nurses, teachers, AmeriCorps volunteers, and other professions, too. Additionally, there are also school, state, and private forgiveness programs.
6. Get a Second Job or Side Gig
Another way you can handle your student loan payments is by increasing your income. To do this, you need to get a second job or a side gig. After you graduate, you may be surprised at how much free time you have. In addition to your regular, nine to five job, consider working part-time at a retail store or restaurant. Bartending is an especially lucrative part-time job when you can make an extra couple hundred of dollars a week.
You can also earn some extra cash by getting a side gig. There are plenty of opportunities for someone to find a side hustle. You can join TaskRabbit, drive for a ride-sharing company, sell something online, or any other easy side gig. With this extra money, you will be able to pay off your student loan debt in no time at all.