How to Get Rid of Student Loan Debt
With college now behind you, your student loan debt is before you and will need to be paid back. Federal student loans have a six-month grace period, one that begins on the day that you graduate. That grace period gives you time to plan and take action in a bid to get rid of your student loan debt as soon possible.
1. Consolidation. If you have multiple private student loans, you can consolidate your debt. However, you cannot consolidate private and federal student loans together, and you cannot consolidate loans that are not in your name.
Consolidation may be beneficial if you prefer to make one payment instead of multiple payments. Consolidation may also make it possible for you to switch to a fixed-rate loan, lower your interest rate and extend your repayment term. Keep in mind that if you extend your repayment time you will pay more for your loans than had you left your payment time alone.
2. Budget. Getting rid of your student loan debt should be a priority for college graduates. An earlier SayCampusLife.com report about student loan debt revealed that about 40 percent of all loan debt is held by older Americans, with people in their 40s, 50s and 60s still paying down their loan debt.
Plan to make your monthly student loan payments on time. If you fall behind, you will incur fees and may be penalized with a higher interest rate. Your credit will suffer too. If able, make an extra payment each year — in doing so you will reduce your repayment time. You can also pay an extra $10 or $20 per month to effectively reduce your costs and shorten your repayment service.
3. Loan Forgiveness. There are a few ways to get your student loans forgiven. One, is to join a program that provides teachers for schools in disadvantaged areas of the country. Under this arrangement, you may receive forgiveness of up to $5,000 if you are considered a highly qualified teacher.
The Public Service Loan Forgiveness program makes it possible to obtain loan forgiveness or a credit toward your student loan, if you serve in AmeriCorps, the Peace Corps or VISTA. Forgiveness is also possible if you join the US military to serve in the Army, Air Force, Navy or Marines. Loan forgiveness may also extend to working for certain nonprofit organizations, provide child care services in under-served communities or meet a national need.
If you are overwhelmed by your student loan debt, don’t ignore the problem. Get help. A student loan advisor at your college or a private financial advisor may be able to provide guidance on the steps you can take to pay down your debt.