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When it comes to money, I regularly battle against a fear-based mentality. And one of my biggest fears is running out of money in my golden years.
While I’m young and working, I can ensure that my bills are paid and I’m contributing to my savings. But what happens when I retire? Or if I’m forced to retire at some point due to my age?
Now, reports are showing that the elderly aren’t just having these fears, they’re battling student loan debt with the rest of us. I don’t know about you, but the last thing I want to think about when I’m older is my student loan debt. Here’s how I’m going to ensure that I won’t have to — and how you can too.
How the elderly are being affected by student loan debt
Because the student loan problem is still relatively new in America, it might seem surprising that the elderly are being affected by it.
But they are — and the number of the elderly affected is increasing. In fact, the number has gone up by nearly 60 percent over the past few years, according to Politico. What’s worse, many of those who can’t pay are dealing with garnishment of their social security.
Can you imagine needing student loan help even in retirement? How about losing your limited retirement funds to student loan repayment? I think we can agree that it’s best if you never have to face this in your golden years. Here’s how you can make sure you don’t.
How to get student loan help now to avoid needing it in retirement
1. Pay your loans off — or get them forgiven
Many older borrowers who have defaulted ignored their loans for decades. And now they’re being forced to repay through deductions from their social security. If that’s not proof that you can’t hide from student loan debt, I don’t know what is.
The absolutely best thing you can do for future you is to convince present you to pay those loans off. If you can’t afford to pay them off faster than your repayment plan, that’s OK. Just make sure you keep paying the full amount due every month — on time.
If you need student loan help, and can’t make your payments, sign up for an income-driven repayment plan. These plans ensure you get the lowest possible payment and make you eligible for student loan forgiveness. And if that won’t help enough, you can always explore deferment or forbearance.
2. Check your credit report regularly
Here’s a scary thing to consider: You might think you don’t need help with student loan debt. You might think that you already have your loans paid off, only to find out that one of them was sold to a servicer who failed to contact you. And since you didn’t know about it, you didn’t pay on it, and you could end up in default.
That’s why it’s important to check your credit report at least once a year. Make sure you check your report from all three bureaus, and if you see something you don’t recognize, dig deeper. It could either be a mistake or a loan you didn’t know about — either way, the sooner you handle it, the better.
3. Don’t co-sign loans for others
If someone you know needs student loan help, you might be tempted to co-sign. But you shouldn’t co-sign unless you’re sure you can afford to repay the loan in full. Otherwise, you could end up in a situation in which both of you default.
Ideally, you’d be co-signing for someone just to help them get approved, but you never know when hardship can strike. Even if that person never intends to default on the loan, there’s no guarantee that they won’t. Consider the rule of lending money: Don’t lend it unless you can afford to lose it.
4. Start saving for college for your kids now
If you have kids or plan on having kids in the future, start saving for college now. This will help offset their costs and your own — since you might take loans out to help them go to school.
But if you already have kids (or grandkids) in college, you might want to think twice before you take out loans for them.
“Young people have the benefit of time on their side to grow income as well as investments,” said financial planner Kaya Ladejobi. “They are a long way from retirement. It’s more forgiving if they carry debt than someone on fixed retirement income.”
As parents and grandparents, you want to give everything you can to your kids or grandkids — especially when it comes to education. But giving them support in a way that also protects you is the best scenario for everyone. Give to your kids and grandkids if you can afford to do so. Just make sure you do it in a way that doesn’t risk your own financial stability.
Seek help with student loan debt and get a handle on your future
When people talk about student loan debt, it can be hard to face the fact that the loans are already signed for and the damage is done. But that doesn’t mean you don’t have control over the situation.
Even the most seemingly hopeless of student loan situations can be fixed. Whether it’s through federal assistance programs, a strong debt payoff plan, or refinancing to lower rates.
As long as you seek help with student debt if you need it now, then you can get a handle on it. That way you can look forward to what your golden years should be about — enjoying life.
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