Student loan debt might just be the biggest financial problem facing today’s 20- and 30-somethings. Got student loans you can’t wait to pay off? Welcome to the club. As of 2018, Americans owe more than $1.5 trillion on student loans. That’s more than on credit cards and auto loans combined.
Education is essential to increasing your lifetime income, so don’t feel bad about borrowing for your degree. That said, you want to ensure your student loan debt doesn’t crush your dreams before you can even get started. If you’ve got a lot of student loan debt — $20,000, $30,000, $50,000 or even $100,000 or more — we can help.
How To Manage Student Loan Debt
Organizing your student loan debt
Student loan debt can make you feel as if you’re a slave to your lenders, but having student loans doesn’t have to be a life sentence. Nor does having student loan debt means you can’t have a life.
The best thing you can do is to confront your student loan debt as soon as possible and make a long-term plan for how you to pay it all off. Ideally, you would do this during the grace period after graduation during which many federal loans do not require payment. But even if you’ve already been paying on your student loans for a few years, it’s never too late.
Determining how much student loan debt you have. Do you know how much you owe? If not, the first step is to make a list or spreadsheet of all of your loan balances, interest rates, monthly payments, and due dates.
Making a student loan payoff plan
Decide whether you are comfortable managing multiple student loans or whether to consolidate them into one or two larger loans. With your loan balances in front of you, it’s time to determine the smartest way to pay off your student loans according to your budget and other goals.
Consolidating your federal student loans can make life easier because you’ll have one or two loan payments instead of a dozen. In some cases, consolidation can also lower your interest rate.
If you are intending to stick it out with multiple loan payments, make sure you have your due dates organized. Most lenders will adjust your due date if you call and ask. Consider making all of your loans due on the same date or splitting them into two groups (for example, making half due on the 1st and half due on the 15th of each month).
