How to Save on Your Student Loan Payments
Here we are in the twilight days of summer, and that means back to school sales are in full swing. For those of you heading off to start (or continue) your higher education at your local university, you probably already know you face something more costly than textbooks and Trapper Keepers - student loans.
Before you start pulling your hair out, wondering how you’re going to find debt relief when those bills start piling up - and they will; according to the Wall Street Journal, outstanding student loan debts total nearly $830 million - check through this study guide on ways to ease the financial burden of student loans. Don’t worry, there won’t be a quiz at the end.
• Pay it as quickly as you can. Really, the best advice you’ll get on paying down any kind of debt, student loan of otherwise, is to pay it off as quickly as you can so you won’t have to worry about it again. This is easier to do if you’re already working. Commit as much of your income as you can afford to paying bills. Any other extra cash you may see, from tax returns to birthday cards from grandma, put them towards your student loans, and you’ll be surprised at how manageable your loans will start to seem.
• Find a part-time gig. If you don’t already have a job, even a part-time one, consider looking for a gig after classes or on weekends to help you start paying the bills down. Anything from a retail job or babysitting, to tutoring or freelance work will not only help you bring in some extra cash for yourself and your bills, but it’ll help you build up an employment history as well.
• Work for The Man. New to students borrowing federal funds for their education is a program sponsored by the Department of Education called Public Service Loan Forgiveness. If you’d rather join the Peace Corps than the Gap, or go into any government agency for work, your loan may be forgiven after 10 years of service and on-time payments. If you have a substantially high amount of loans on your plate, this might be worth looking into.
• Tack it onto your income. Another option for those with federally-funded student loans, and one that doesn’t require 10 years of service, is to check if you qualify for Income-Based Repayment, a program that caps your loan payments based on your income. Typically, these amount to 10% of your income, and will forgive any remaining debt after 25 years of payments.
• Just deduct it! Did you know you can deduct up to $2500 in interest on your student loans from your taxable income? Well, you can! Not only that, but any money you save goes towards paying the debt down.
• Stay on target. Finally, no matter what you decide to do to try and pay off your student loan debts as quickly as you can, remember to always at least pay the minimum balance on time every month. Debt is an easy thing to slip into, and student loans are no different. Unless you want to spend a good chunk of your adult life paying for college, keep paying your bills on time.