What Are the Best Ways to Reduce Student Loan Debt?
After you graduate from college, graduate school, or another education program, you have so many opportunities in front of you. But there’s likely something that’s weighing you down: student loans.
Today, Americans are facing more student loan debt than ever before, with the average student graduating with approximately $29,800 in loans. And nearly 70 percent of students, or 45 million borrowers, are carrying this massive debt.
If you’re wondering how you can reduce your student loan debt, there are options. There are ways you can lower your payments – or potentially even get rid of your loans. You just need to know where to find them.
Consolidate Your Loans to Make Repayment Easier and More Affordable
No matter what type of loans or student debt you’re facing, consolidation is an excellent option. Most people who have student loan debt are dealing with multiple loans and multiple loan companies, which can result in high monthly payments and the need to make multiple payments every month.
Consolidation can make repayment easier, simpler, and potentially more affordable.
Student loan consolidation is a process that combines multiple student loans into one single, bigger loan. Consolidation essentially rolls all of your debt together, giving you one loan, one monthly payment, and one interest rate.
And consolidation can offer huge financial benefits. You’ll get a new loan with a new interest rate – and that interest rate could be lower, which will save you thousands of dollars when you repay it. You may also lower your monthly payments, as consolidating your loans can give you new loan terms, with a payment you can afford.
Refinance Your Loans to Lower Your Monthly Payments
Student loan refinancing gives you the opportunity to reap the benefits of loan consolidation – but you’ll also get better benefits that could reduce your overall debt.
Refinancing your student loans is like refinancing a mortgage or any other kind of debt. You’ll hand your debt over to a new lender, who will renegotiate your loan terms and combine all your loans into one single loan.
And refinancing can help you save more money, repay your loans faster, and pay less over the lifetime of your loans. Typically, refinancing is a great choice for high-interest private student loans.
Refinancing can lower your monthly payments by securing you a lower interest rate and changing the length of time you have to repay your loan. Additionally, if you have good credit, you may be able to choose a fixed interest rate, get discounts for enrolling in automatic payments, or even adjust your monthly payment.
Apply for Federal Perkins Loan Cancellation
If you work or volunteer in certain professions, organizations, or sectors, you may be able to have all or some of your student loan debt cancelled.
When your student loan debt is cancelled, you’re no longer responsible for repaying it. You can see as much as 100 percent of your debt cancelled, if you meet the requirements or qualifications.
All Federal Perkins Loans are eligible for cancellation. In order to qualify for discharge or cancellation, you’ll need to meet conditions like the following:
- 5 years of service as a teacher.
- 5 years of service as a full-time nurse or medical technician.
- 5 years of service as a full-time firefighter.
- 5 years of service working with the disabled.
- 5 years of service working at a tribal college or university.
- 5 years of service as a full-time member of law enforcement.
These are just a few of the careers and volunteer opportunities that can qualify you to have your loans completely cancelled.
Apply for a Student Loan Forgiveness Program
If you’re hoping to eliminate some of your student loan debt, you may be able to do exactly that – without repaying it yourself. The U.S. government offers student loan forgiveness programs that will erase, or forgive, your debt in its entirety.
In order to qualify for student loan forgiveness, you’ll need to apply and meet special requirements or qualifications. For example, working in public service or as a teacher for a number of years can qualify your federal loans for forgiveness.
You simply need to contact your loan servicer to find out if you can qualify and apply for student loan forgiveness.
Make Your Student Debt More Manageable
If you’re struggling under the weight of your student debt, it’s important to know two things. You aren’t alone, and you have options.
But, in order to take advantage of those options, you need to know they exist. And you need to do your research to see if you can qualify for them. If you’d like to lower your monthly payments, make repaying your loans easier, or try to get your loans forgiven or cancelled, you’ll need to see if you qualify.
To do this, you’ll need to search for options like student loan refinancing and consolidation, forgiveness and cancellation. Then, you can compare the options available for your loans and your specific student debt and choose what’s best for you.