When the future you’ve planned and studied for arrives, it often comes with student loan repayment notices.
Welcome to reality.
Starting your career and your loan repayments within months of each other can seem like a rude awakening, so here are seven tips to help relegate your student loan payment into just another routine expense:
- Don’t lose track. Create an inventory of all of your loans, along with contact information and account numbers. Having such a list makes it easier to let loan providers know when you move. In addition, it makes any inquiries you have easier to handle. It’ll also help ensure you don’t lose track of any of your loans or payment dates. If you need help accounting for all of your federal loans, visit: https://www.nslds.ed.gov/nslds/nslds_SA/.
- Automate so you’re not late. Most lenders offer auto-debit options that transfer payments from your bank account to your loan provider. This helps prevent late or missed payments. Skipped payments are a big deal and can impact your credit score. Some lenders offer incentives—like a lower interest rate—when you choose to auto debit.
- Stay fee free. Changing your federal loan repayment program, consolidating loans or accessing postponement relief is free and something you can do directly with the U.S. Department of Education. However, it sometimes helps to have an advocate to work with and sort through the options. But while such advocates may charge a nominal fee for the time they spend with you, avoid anyone who claims they can reduce your student loan payments for a fee.
- You earned it—claim it. Student loan interest is deductible up to $2,500 on federal tax returns. It’s an exclusion to income, so you needn’t itemize in order to claim it. It can return up to several hundred dollars, making it worth filing for.
- Say something. If you run into trouble, especially on a federal loan, raise your hand. Contact your lender or an advocate who can help you sort through options for reducing or postponing payments. Relief is readily available in times of job loss or medical emergencies.
- Work that grace period. With many loan types, there is a grace period between the time you leave school and when repayments start. Use this period to make payments anyway. It’ll lower the interest you end up paying on your loans, but it’ll also gives you an opportunity to settle on a budget you can live with.
- Ask for the gift of education. As much as gifts are appreciated, you may want to ask your family and friends to give you cash that you can apply to your loans. As you earn raises or receive bonuses, you might want to similarly redirect it toward making extra payments, especially on your higher interest loans.
Should you want more information or ideas on how to manage your student loan debt, just give us a call.