Five steps to tackling and consolidating student loan debt

Whether you are in your 20s with a bachelor’s degree or in your 30s paying off a masters or Ph.D., student loan expenses can be daunting.  If you’re drowning in debt, here are five steps to help you get out of it.


  1. Know what you owe

    Make a list detailing how much you owe and the monthly payment(s). Start with the National Student Loan Data System for a list of federal loans. Add any other loans that don't appear in the federal loan database. Be sure to include these expenses as part of your monthly budget.

  2. Pay early

    The sooner you pay off debt, the more you may save on interest expenses. Plus, there are no prepayment penalties.

  3. Pay on-time

    Late payments will have a negative impact on your credit report.  This can make it harder and more expensive to get a car loan or a mortgage. Many potential employers look at your credit profile as a measure of responsibility. A bad credit report can limit your job opportunities.

    If the unexpected happens (e.g., unemployment, illness or other events that make it impossible to pay back your loans) contact your loan servicer immediately.  They may be able to modify your repayment plan based on your income or other factors.

  4. Consolidate

    If you have multiple student loans and are concerned about keeping track of them, consider consolidating.  A consolidation loan combines all of your student loans into one monthly payment. One loan means only one due date and one check to write.  A consolidated loan may have a lower interest rate. While there are benefits to a consolidation loan, keep in mind that you increase the length of your repayment period and you will also make more payments and may pay more in interest.
    All federal student loans and many private student loans can be consolidated.
  5. Seek help from your employer or the government

    You may be eligible for student loan help from your employer or the government. More and more employers offer student loan payoff assistance these days. Such an arrangement will likely require a commitment to remain employed there for a minimum number of years. Or you might be eligible for Public Service Loan Forgiveness (PSLF) from the federal government. The PSLF program generally requires that you work for a public interest organization for a number of years. If you enjoy your line of work, the commitment could be worth it.
Following the tips above can help make sure that getting your student loans under control is smooth sailing.

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