Tackling and consolidating student loans

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 swim to shore.

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 state, institutional or private loans that aren’t recorded in the federal loan database. Be sure to include these expenses as part of your monthly budget.

Pay early

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

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 prevent you from getting a job.

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.


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.

Talk to your employer

Some employers offer student loan payoff programs as an employee benefit.  You may have to agree to work at the company for a certain number of years to qualify.  However, if you enjoy what you do, the commitment is worth it.
Following the tips above can help make sure that getting your student loans under control is smooth sailing.

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