7 Student Loan Tips
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Transcript of 7 Student Loan Tips
7 Ways To Manage, Reduce, or Eliminate Your Student Loan Debt
Flickr/ KitAy
1.) Pay-as-you-earn• This program limits
payments to just 10% of your discretionary income
• Any remaining balance after 20 years of on-time payments will be forgiven
• For more details, check out the fact sheet
Wikipedia/ Mando vzl
2.) Income-based repayment (IBR)• This program limits
payments to just 15% of your discretionary income
• For those who don’t qualify for pay-as-you-earn
• Any remaining balance after 25 years of on-time payments will be forgiven
• For more details, check out the fact sheet
Flickr/ Andrew Schwegler
3.) Take your time!• Even if you don’t
qualify for an income-dependent repayment plan, you can extend your payment plan’s timeframe up to 25 years
• You’ll pay more in interest over the life of the loan, but the payments will be more manageable
Payments for $50,000 in student loan debt
4.) Lower your interest rate• If you have private student
loans, now may be a good time to refinance and take advantage of low interest rates
• The better your credit, the lower your payment could be
• Lenders like Discover Financial are offering rates as low as 2.99% (variable) or 5.99% (fixed)
Flickr/ 401(k) 2012
5.) Teacher Loan Forgiveness• Teachers in
low-income schools can qualify for up to $17,500 in student loan forgiveness– Full-time secondary and
elementary school teachers can get $5,000 in forgiveness after five consecutive school years
– Highly-qualified mathematics, science, and special education teachers can qualify for $17,500 after five years
6.) Do you work in the public sector?• Public service employee
s may be eligible to have any remaining balance forgiven after 10 years of on-time payments
• Qualifying jobs include– Education– Law enforcement– Healthcare (non-profit)– Public libraries– Public legal services– More (see description) Flickr/ Dave Conner
7.) Deferments and Forbearance• A deferment is a period during
which repayment of your loan is temporarily delayed– May last up to three years during
periods of hardship, such as unemployment
• If you don’t qualify for a deferment, a forbearance may allow you to stop paying for up to 12 months– Unlike a deferment,
interest will continue to accrueShould be used as a last resort
Are you taking advantage of this tax loophole?