Strategies to deal with student loan debt
Student loan payments are back. Starting September 1, if you owe money on a federal student loan, interest will kick back in for the first time since 2020. And the very next month, your first payment since the pandemic will be due. If that has you stressed, here are some strategies to help deal with the debt.
Check for Forgiveness
The first thing you should do is check if you qualify for any debt forgiveness programs. There are a few options, including:
- Teacher Forgiveness. Full-time teachers who work for five years at a low-income school.
- Disability Forgiveness. People who have been permanently disabled.
- Closed School Forgiveness. If you attended a school that has since closed you might qualify.
- Public Service Forgiveness. People who work in non-profit sectors.
Pick a Good Payment Plan
One thing that can help with your student loan debt is to enroll in an income-driven repayment plan. Just as the name suggests, this plan is tied to how much you earn. Though this strategy does draw the payments out, if you’re still paying after 20 to 25 years, your remaining debt will be dismissed.
Pay Extra
If you have any extra funds, it’s always a good idea to pay more than your monthly payment. That’s because that payment is the lowest amount of money you can pay. Any extra money will go directly toward lowering your principal balance. That’s huge because you’ll pay the loan off faster, which allows you to avoid paying interest.
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