Managing student loan debt can be challenging, but developing a repayment strategy based on your specific situation will ensure you build a secure financial future.
You are not alone!
Current estimates of American student loan debt put the total at over $1.3 trillion . Doesn’t that sound like a lot of debt? That’s because it is. However, financing an education through student loans can also be an extremely valuable investment that qualifies people for high-paying, prestigious jobs that would otherwise be unattainable.
If you are feeling overwhelmed by student loan debt, here are some tactics to help you stay on top of your payments:
Things you can do: Actions you can take?
- Make sure you understand your loan balances, terms and interest rates.
- Consider consolidating your loans if you have multiple or high interest loans.
- Explore loan forgiveness. Some employment opportunities like teaching or public service offer the added incentive of loan forgiveness.
- Make a budget and stick to it. Decrease your expenses wherever possible so you can both repay your loan and maybe even save a little money along the way.
- If you can, pay extra on your student loans, as it will help pay down the debt faster.
Student loans are a unique form of debt that allow you to carry high debt levels with low minimum payments for a long period of time. However, just because you can stretch out the time frame for repayment doesn’t mean you should. The faster you can pay down your debt, the less interest on your loan will “compound,” and the less you will pay overall.
Use your IRA to pay off a loan
To be eligible to use an IRA distribution for higher education and get the 10% early withdrawal waived, expenses must be for yourself, your spouse, your child, or your grandchild. These funds can pay for books, tuition, and other qualifying higher education expenses, and students must be enrolled more than half-time at an eligible institution as defined by the Department of Education.