Dealing with student debt can be a real pain. But it’s, unfortunately, a reality for tens of millions of people in the United States, who owe a collective total of $1.73 T in student loans. Many of these individuals are struggling to make their payments. If you’re in this boat, here are some of the best student debt solutions.
What Student Loans Can Be Forgiven?
Before you look into any other student debt solutions, you’ll first want to see if your loans are eligible for forgiveness. While not all qualify for this, it’s certainly much better to not have to pay your loans at all.
The main thing to note here is that direct loans from the government are the primary criteria. There are also Stafford loans, which just took the place of direct loans. You might also be able to consolidate other government student loans to make it work. Beyond this, however, there are few options for total loan forgiveness available right now. Though, this could change at some point in the future.
There are certain programs that incorporate your income into loan repayment to help you get through your debt. While there are certainly benefits to this, it’s important to know the full story before diving right into this solution.
You’ll essentially be paying a portion of your income to loan repayment. In order to accommodate for this, the term of the loan is likely going to be expanded from the standard ten years to 20 or 25. Paying a significant portion of your income to student loan debt for that long can be really tough. However, this might ultimately be the best option for people in lower-paying fields who have a lot of debt.
It’s never going to hurt you to talk to an accredited credit counselor. While it’s important to make sure the person you’re talking to is legitimate, credit counseling is generally a great way to move your finances in the right direction.
If you’re having a tough time navigating how to repay your student loans, a credit counselor might be able to provide you informational materials or even connect you with assistance. It’s possible they’ll know about certain student debt solutions unfamiliar to you.
Student Loan Consolidation
Debt consolidation is another path that might help you get a better grip on your student debt. Consolidation is where you take multiple loans and turn them into a single new one.
Ideally, this will come with a lower interest rate, making your monthly payments lower and more streamlined. Here are some of the most crucial points when it comes to consolidating student debt:
- You’re typically going to have a much longer duration loan when you consolidate. This will typically lower your monthly payment by a significant amount but can increase the amount you’ll pay in interest over the long term. However, being able to build up equity instead of paying off debt early in life can more than offset that difference.
- You can switch variable-rate loans to a fixed rate. This is typically vastly preferable because you can lock in a predictable, low-interest rate and not have to worry about it going up later.
- Consolidating takes outstanding interest on the old loans and turns it into principal on the new ones. This can lead to you potentially owing quite a bit more if there was a significant amount of unpaid interest. It’s important to look into how this will be calculated.
- Importantly, there are a lot of qualifications involved with student loans. It’s possible consolidating might affect your standing with some other form of borrowing program. You’ll need to determine this before deciding to consolidate.
Seek Employers That Will Offer Assistance
Some companies will offer their employees special debt repayment assistance. If you’re struggling with debt, or even if you just want to pay off your debt faster, seeking an employer that offers student debt help can be a major win.
These are just a few major organizations that will help you pay back thousands of dollars of your student loans. If you’re a great employee, doing this is certainly worth it to them.
Having to pay student loans can be a major drag on your finances. Looking for the best ways to get out of student debt will benefit you in the long run.