4 Ways Ease Burden Student Loan Debt[yoast-breadcrumb]
4 Ways to Ease the Burden of Student Loan Debt
Student loan debt is a huge problem these days. Lots of graduates are struggling under the weight of massive student loans. It can feel totally overwhelming! But there are things you can do to make it more manageable. Here are 4 ways to ease the burden of student loan debt:
1. Income-Driven Repayment Plans
One of the best options for dealing with large student loans is to get on an income-driven repayment plan. These plans base your monthly payments on your income and family size. There are a few different options – like IBR, PAYE, REPAYE. They usually cap payments at 10-20% of discretionary income.The payments are more affordable, and if your income is low enough, you can qualify for $0 monthly payments. Interest still builds, but after 20-25 years of payments, any remaining balance is forgiven. It’s a great way to keep payments manageable now, and get rid of the debt later.
2. Student Loan Refinancing
Refinancing student loans to a lower interest rate can save you thousands of dollars in interest. Rates are super low right now – like 3-5% for good credit. That’s way better than the 6-8% rates on federal loans.The pros of refinancing are the lower rate and payment. The cons are losing federal loan benefits like deferment and forgiveness programs. Run the numbers to see if it makes sense for your situation. Student loan refinancing companies like SoFi and Earnest can help you check rates and apply.
3. Deferment or Forbearance
If you’re struggling to make payments, deferment or forbearance can provide temporary relief. Deferment pauses payments completely, while forbearance reduces or pauses them. You have to re-apply periodically.Deferment is better since interest doesn’t build on subsidized loans. But forbearance is open to anyone with federal loans. You can get deferment or forbearance for things like financial hardship, unemployment, or going back to school. It gives you time to get back on your feet financially.
4. Student Loan Forgiveness Programs
There are a few federal student loan forgiveness programs that cancel debt after working in public service for a period of time. The Public Service Loan Forgiveness Program offers forgiveness after 10 years of payments and public service work.Teacher loan forgiveness programs like Teacher Loan Forgiveness provide up to $17,500 in forgiveness for teachers in low-income schools. Look into these if you work in an eligible field. Just make sure to submit certification and follow the requirements.
Dealing with student loans is tough, but there are always options to make it more manageable. Look into income-driven repayment plans, refinancing, deferment or forbearance, and forgiveness programs. And reach out for help – there are many student loan counselors who can walk you through the best steps for your situation. Don’t despair – you’ve got this! With some smart moves, you can ease the burden and take control of your student loans.