There’s a lot of student loan advice out there about how to properly manage your debts. How do you know what tips are most effective for you, or which ones actually work?
We reached out to professionals who all have experience with student loans and asked them to share their one best tip for new grads. Here’s the student loan advice that 12 experts feel is most important for borrowers trying to pay off student loans.
Student loan advice from experts
Know your numbers
One of the first things to do as a new grad facing student loan payments is to get organized. “Figure out exactly what student loans you have and who is servicing them,” says lawyer Adam Minsky of Boston Student Loan Lawyer.
“Make sure you know what your balances, interest rates, and monthly payments are, and when your grace period ends,” he adds. It’s all well and good to be ready to make payments on your student loans, but you must know all of these details to avoid financial trouble.
“Make sure all of your loan servicers have updated contact info for you,” warns Minsky. You don’t want any of your student loans to fall through the cracks because your servicer can’t find you.
Understand all available payment options
Part of your organizational process should also include researching and understanding your student loan repayment options.
When it comes to federal loans, “the repayment plan you choose now does not have to be the repayment plan for the entire life of the loan,” says Liz Stapleton, the finance blogger behind Friday Night Shenanigans.
“As your financial situation changes so can your repayment plan, and it can be changed up to once a year.”
Make payments as soon as possible
Just because you don’t have a bill for your student loans doesn’t mean you can’t make payments towards it.
Christie Mn, a small business owner in California, shares her best student loan advice from her own experience: “Pay off as much as you possibly can, when you can, even if it’s before you owe anything.”
Doing this helped push back her due date for 2 years, giving her the financial freedom to start her own business instead of stressing out about student loan payments.
Keep living like a student
After graduating, it’s easy to start spending more money. You need professional clothing for interviews and furniture for your new place, right? It’s tempting, but do your best to avoid lifestyle creep during the first few years after graduation.
“Keep living like a college student,” says financial coach Whitney Hansen. “Even if you get a great job right out of college, continue living on your college student budget and put all the extra income towards your debt. Your future self will thank you.”
Hunt for jobs with loan forgiveness plans
As you begin the job hunt, “research loan forgiveness plans to see if they exist in your field,” says Elizabeth Colegrove, blogger at Reluctant Landlord. If your industry does offer these types of programs, she encourages graduates to “make sure you review this when considering positions.”
You can also seek out jobs that offer loan payment plans as part of their employee benefits package. “This can be worth a lot of money, so a lower-paying job might really be higher when considering this benefit,” she explains.
Sign up for automatic payments
Did you know that some financial institutions offer a small interest percent discount when you sign up to pay your loans automatically?
“Contact the student loan issuer and ask about all of the available options,” says Taylor Schulte, a certified financial planner and founder of Define Financial.
With a simple phone call to the bank, Schulte’s family was able to lower their monthly interest rate on their loan. “To our surprise, just by signing up for monthly auto-pay we lowered our rate by 0.25%. Pick up the phone and start asking questions — you might be surprised what you learn!”
Consider joining the military
This option may not be for everyone, but joining the military for a period of time can help you get further ahead with your career and finances.
“They’ll pay back your student loans, give you a salary, house you, and give you the experience needed to actually get a job when you can’t find one after graduating,” explains blogger Addie Clark of Fit, Fab, and Foreign.
Pay the accrued interest
As mentioned above, you want to start making monthly payments on your student loans as soon possible. But what if you’re unable to do this right out of school?
“If you can’t make the monthly payments, at least pay off the accrued interest in a lump sum before that grace period is over,” says finance blogger Rebecca Stapler.
Direct all of your payments, whatever size they might be, towards accrued interest. “This will prevent the accrued interest from capitalizing,” she says, “which would mean that the accrued interest is added to your principal and then you pay interest on the accrued interest.”
Opt out of your grace period
The grace period you have after you graduate (usually 6 to 9 months) is a tempting notion. But a smart financial move is to opt out of this grace period the day you leave school.
“You can do so in writing and elect into an income-dependent repayment plan,” says lawyer Jay S. Fleischman of Consumer Help Central.
“Doing so will set your payment at or near $0 per month for the first 12 months because you probably had little or no income in the prior year,” he explains. Opting out of your student loan’s grace period could give you a headstart on repaying your debts.
Make debt payoff the focus (not your loan balance)
You might be overwhelmed at the amount of money you have to pay back. This can be discouraging for anyone who’s just starting out in the workforce and getting their footing in the world.
Lindsay VanSomeren, finance blogger at The Notorious D.E.B.T., shares her best student loan advice. “Don’t focus on the huge balance; it’s overwhelming. Make debt payoff a priority, but focus on tackling small chunks at a time — $1,000 increments or so. Each small chunk is mentally easier to deal with, and they do add up!”
Don’t ignore financial problems
The final piece of student loan debt advice may seem obvious, but it’s an easy trap to fall into: Don’t defer, forbear, or default on your student loans if you can avoid it. “Deferring only delays the inevitable and it takes that much longer to be free from the debt,” says Melissa Whaley, founder of Whaley Bookkeeping.
And don’t put off problems you have with your student loans or other debts — face them head-on. “Student loan problems will not go away if you ignore it,” warns former student loan borrower Krystal Hart. “You made a promise to pay it back when you took out the loan, so do it.” If you need help, ask for it but don’t assume the problem will just disappear.
Getting on top of your student loans will take time, but by applying this tried-and-tested student loan debt advice, you’ll be able to come out on top.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|