Student debt should not hold you back from life. See these six strategies/tips to minimize, manage, and have your debt forgiven or pay off your loan faster.

Graduating from college is a huge milestone for many young adults. Frequently, it can be followed by a cloud of debt. Now is the time that graduates need to begin providing for themselves entirely. Mom, dad, and scholarships are no longer the fountains of funding they used to be. After you get a job, aside from food and shelter, paying off student loans becomes a big part of the new financial responsibility.

These loans can seem insurmountable. But with careful planning and steadfast attention, it’s not impossible. If you’re like most people, you want to pay this off as soon as possible. The faster you pay, the more you save. Fortunately, there are some good strategies to tackle your student debt. Let’s take a look at some tips and techniques to lower your student’s loan debt.

Strategy 1: Work for a company that offers loan forgiveness.

“It’s better to ask forgiveness than permission,” or so they say! Some public service jobs qualify for loan forgiveness. It may seem like you were in school for an eternity and you wanted to get out, but now it’s going to be the opposite. Time will fly by faster than you can apply wrinkle-reducing moisturizer. At the end of this period, you can have your remaining balance forgiven, be it a private student loan or not!

  • Public Service Loan Forgiveness: If you have a qualifying job (such as working at a non-profit or government organization) for 10 years and make 120 on-time payments of your federal direct loans, the remaining balance on your loans can be forgiven.
  • Other Perkins Loan Cancellation Options: If you have Perkins loans and participate in certain public service activities or work in certain occupations, some of your loan balance can be canceled for each year of service.

For example, up to 70% of your loan balance can be forgiven if you serve with the Peace Corps or AmeriCorps VISTA programs. Up to 100% of your loan balance can be forgiven if you work as a librarian at a Title 1 school or at a library that serves students from Title I schools. Attorneys working in public interest fields, full-time employees at Head Start programs, and full-time employees at family or child services agencies can also have up to 100% of their Perkins loans canceled.

Strategy 2: Pay more than the minimum.

It’s tempting to pay the minimum, but it may not be the best decision. By increasing your payments, you get a similar effect as with the first strategy. Lowering your principal debt faster means paying less and less interest as you go. Any amount of increase helps. Sit down and take a close look at your budget. Can you afford to increase? Even if it’s only a few dollars, it gets your foot in the door to savings.

Strategy 3: Pay off the high interest ones first.

Now that you are utilizing the first 2 strategies, make sure you do so on the high interest ones first. Assuming you have more than one, check out the interest rates on each and focus these strategies on the higher ones. If you come into extra income by some stroke of luck, these will be the ones you should pay off first.

Strategy 4: Take advantage of tax deductions.

Did you know you can take a tax deduction of up to $2,500 annually for student loan interest? If you take advantage of the student loan interest tax deduction based on the actual amount of interest you pay, it reduces your Adjusted Gross Income (AGI), so you pay less in taxes.

Strategy 5: Switch to bi-weekly payments.

When you make monthly payments, you make 12 payments a year. Obviously, because any given year contains 12 months. If you switch to bi-weekly payments, you will be paying 26 times a year. Essentially, you are tricking yourself into paying an extra month because 26 divided by 2 is 13. Since you are also paying your principal faster, your interest goes down faster as well!

Strategy 6: Consolidate and refinance.

Private student loan consolidation, or refinancing, is the act of replacing multiple student loans — private or federal — with a single loan that can be paid using a single monthly payment over a sensible repayment loan term. Not only will this simplify your life and finances, it can often come with a lower interest rate. If you look at the interest rate of all of your loans, you can usually find a way to consolidate them with a company that offers a lower percentage. Who doesn’t like simplicity, especially when it comes at a cheaper price!


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