Struggling with student loan debt? Discover effective strategies to break free in our comprehensive guide on how to get out of student loan debt. Here’s a list of actionable tips to tackle your financial burden and relieve yourself from the burden of student loans.
Income-Driven Repayment Plans: Federal student loan borrowers can opt for plans like Income-Based Repayment or Pay As You Earn, capping monthly payments at a percentage of income. After 20-25 years, remaining debt may be forgiven.
Explore Forgiveness Programs: Federal loans offer options like Public Service Loan Forgiveness, Teacher Loan Forgiveness, Disability Discharge, Closed School Discharge, and Borrower Defense to Repayment. These programs forgive some or all of your federal student loan debt under specific conditions.
Consolidate Federal Loans: Combine multiple federal loans into one with a Direct Consolidation Loan. This simplifies payments and can provide access to benefits like income-driven repayment and loan forgiveness. Private loans can be consolidated too, potentially offering lower interest rates.
Pay Down Principal: Making extra payments toward your principal balance reduces the overall debt and saves on interest. Notify your loan servicer to ensure the additional payment goes toward the principal.
Refinance for Lower Rates: Refinancing involves taking out a new loan, ideally at a lower interest rate, to pay off existing student loans. This can lower monthly payments or shorten repayment duration. Consider factors like credit score, co-signers, and comparing rates across multiple lenders. However, refinancing federal loans forfeits federal benefits like income-driven repayment plans and loan forgiveness programs.
