How To Reduce Your Student Loan Debt

If you are overburdened with student loan debt, you have a few options that can help you reduce your debt load.  The type of student loan you have will determine which options you can use. You will find that with a little bit of research and time you can greatly reduce your monthly obligations.

If you have a federal student loan you may be in luck.  Federal loans under the new administration plan are able to be consolidated and reevaluated for repayment based upon your current financial situation.  You must contact the government directly to negotiate a new deal.  You will be required to submit proof of income and income tax forms. You will be required to count income from all family members, so be very careful before you apply.  If your spouse makes a considerable income, this program will not help you at all.  If you do receive a consolidation plan, your payment amounts will be based upon your income and you will need to reapply for this program each year.

If you are in the public service sector you may qualify for student loan forgiveness.  Teachers, those who work in the police and fire departments, and some workers in non-profit organizations qualify for total loan forgiveness under these guidelines.  If you fall under any of these categories - and there are more than are listed here - you should immediately apply for loan forgiveness.  Again, you must contact the federal government office that holds your loan and apply directly through that office.

If you have privately held student loans such as Stafford or Sallie Mae loans, your only option is to apply for consolidations.  This may or may not get your monthly payment down - but, especially now, it can significantly reduce your interest rates. That can save you a lot of money in the long run and it is well worth the effort to apply.  If you have really good credit you may wish to get a loan from a bank or credit union for the amount you owe on your loans and pay them off directly.  While this is really only a transference of debt, these types of loans generally have lower interest rates and can be paid off much more quickly.  Even if the payments are a little higher each month you may greatly benefit in long run, due to the amount you will save in interest payments alone.


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