8 Ways To Eliminate Student Loan Payments

Student Loan Repayment May Become Easier

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The most difficult thing when dealing with student loan payments is not the payment itself. Instead, it is navigating the complicated and confusing world of the student loan repayment system. There are numerous repayment plans, loan forgiveness programs and a variety of options provided by each state.

Here are some strategies that can assist you in eliminating your student debt:

  1. Become eligible for a Federal Student Loan Forgiveness Program

This strategy is for those with federal student loans that are normally managed by either Department of Education or a student loan servicing company. It also includes the various loan programs run by the Federal government.

There are three main student loan forgiveness programs, with the most popular of them being the Public Service Loan Forgiveness (PSLF).The program provides student loan forgiveness to individuals who have been in public service for ten years. Public service includes government jobs such as education, public safety, law enforcement and other non-profit jobs.

The other two popular ways to access Federal Student Loan Forgiveness is to work as a teacher. Teachers have their own forgiveness program but it is not as comprehensive as the PSLF. You can also work in the military service, but the military loan forgiveness program is being discontinued because of the PSLF program.

  1. Get state assistance

A lot of states provide a wide range of student loan forgiveness programs. Of the 50 states,46 of them offer one or more programs with some of them offering programs that cover a wide range of loan types, employment and so on. As a matter of fact, the state of Kansas provides student loan forgiveness to the tune of $15,000 just for living in specific parts of the state.

California provides student loan forgiveness for health workers, dentists, and doctors.Texas, on the other hand, provides student loan forgiveness for speech therapists, lawyers, professors, doctors, and nurses.

Before throwing in the towel because you think that you do not qualify for federal loan forgiveness programs, it is advisable to check if your state offers any assistance or incentives.

  1. Check if your employer provides tuition reimbursement

Employers are increasingly providing tuition reimbursement to assist employees in furthering their educations. At Starbucks, a full degree program is among the employee benefits. There are also companies that offer Student Loan Repayment Programs. In this case, the company pays off some part of the student loan owed by the employee.

You can also check if your employer provides a tuition reimbursement program as part of employee benefits. The majority of these programs require that one take out a student loan, and after completing the course, the employer reimburses the employee via their paycheck. Some employers provide signing bonuses, among other perks, to employees. As you negotiate your first salary, ask the employer if they will assist you with your student loan payments.

  1. Look into loan consolidation

You can consolidate your student loans in order to be more financially organized, even though this will not lower your payments. This is especially helpful when you have a mixture of federal and private student loans with different due dates and amounts. This will help to avoid your credit score being harmed in case you forget and miss a payment.

  1. Look for a repayment plan that works for you

It is important to get a repayment plan that complements your ability to pay. All graduates are automatically enrolled in a 10-year standard repayment plan, but there is some leeway to change the plan if it does not work for you.

There are numerous plans that help graduates manage their student loan better. Graduated is a repayment plan has a lower upfront payment that then rises with time, while the Extended plan offers lower monthly payments, but one has to pay for a longer time.

  1. Get an income-based repayment plan that has a loan forgiveness feature

If you are choosing a repayment plan and the above options do not seem to work for you, consider getting an income-based repayment plan offered under federal loans. The most common of these are IBR (Income-Based Repayment) and PAYE (Pay-As-You-Earn). The best thing about these two plans is that they also offer student loan forgiveness at the end of the repayment period. The only thing is that you will owe taxes on the forgiven amount.

To subscribe, you will just need to show proof of income to the Department of Education, and the monthly payment will be calculated-usually ten percent of your discretionary income. As a result, the repayment will be quite affordable. But you need to submit your income every year so your payment rises in tandem with your income.

For people working in the public service, signing up for PAYE or IBR and then merging it with PSLF is one of the most effective methods of minimizing their student loan payments.

  1. Refinance the student loan

If one has a private student loan, it is very advantageous to refinance it at a lower interest rate. This lowers both your upfront payment and total interest paid over the term of the loan. A useful trick is to refinance the loan at lower payment but continue to pay the previous payment amount. This is likely to cut years off your loan and save you a boatload of money.

Credible is a comparison tool that can be quite useful in the refinancing process .it assists an individual to get and compare offers from various lenders. A person is then able to choose the loan with the best terms and lowest rates.

  1. Make more money

Lastly, if all of the options above are not working, your best bet is to simply earn more money. If you just made an extra $100 each month and applied it to your student debt, this will reduce your loan balance by an impressive $1,200 every year. Whereas this may seem counter-intuitive, the reason you went to school and took out a student loan in the first place was to enable you to earn more money.

Student Advocates is a privately owned company that helps consumers like you identify government programs that may be suitable to your situation, gather the relevant application documents, and then prepare those documents for your review and submission.  Our services are reasonably priced and our goal is to take the frustration out of the process. If you have questions about your student loans, please feel free to contact us. We’d love to have the opportunity to help you in any way we can.