8 Techniques to Stay Ahead in Your Student Loan Repayment Journey

After more than three years, student loan payments are back on. Starting September 1st, interest on federal loans will start accumulating again, and regular monthly payments will be required from October. So, have you put a plan in place to handle your student loans?

Many people feel worried about fitting these payments back into their monthly budgets, especially with rising living costs. Missing student loan payments can seriously harm your financial stability and credit score.

To help you stay on track with your student loans, here are eight strategies you might find useful:

1. **Know What You Owe**: It’s crucial to understand your total debt. With the pause on payments, you might have lost track of what you owe. Begin by calculating your total debt. Knowing this helps you plan how to repay, consolidate, or even apply for loan forgiveness.

2. **Understand Your Loan Details**: Managing student loans involves understanding your loan terms. Be aware of interest rates, repayment schedules, and due dates. This knowledge lets you create a repayment plan that fits your situation and helps you avoid future financial troubles.

3. **Set Up Automatic Payments**: Set up automatic payments through your loan provider. This ensures you make payments on time and avoid late fees. Plus, some lenders offer interest rate discounts for auto-payments. Just make sure to budget for these payments and keep enough money in your account to avoid overdrafts or missed payments.

4. **Check Out Income-Driven Repayment Plans**: If your loan payments are too high compared to your income, consider income-driven repayment plans offered by the federal government. These plans adjust payments based on your income and family size. If your income is low, your payment might be as low as $0 per month.

5. **Consider Deferment or Forbearance**: If you’re facing temporary financial hardship, you might qualify for deferment or forbearance, allowing you to pause or reduce your loan payments temporarily.

6. **Look Into Public Service Loan Forgiveness**: If you’re employed in public service or have been, you might qualify for a loan forgiveness program. Under this program, federal student loans can be forgiven after 120 qualifying payments while working for a qualifying public service employer.

7. **Focus on High-Interest Loans First**: If you have several loans, prioritize paying off the ones with the highest interest rates first. This strategy, known as the debt avalanche, helps you pay less interest over time.

8. **Make Extra Payments When You Can**: Whenever possible, make extra payments toward your loan principal, like when you receive a tax refund or work bonus. This reduces the principal faster and decreases the total interest you’ll pay over the life of the loan.

Not paying your student loans can lead to serious issues like wage garnishment or even legal action. It’s essential to be proactive about managing your loans, which includes budgeting, exploring loan forgiveness options, and checking out different payment plans. If you’re having trouble making a payment, reach out to your loan provider as soon as possible. They can offer advice on other ways to handle your student loans, such as loan consolidation or rehabilitation programs.