I don’t even want to go into detail about the people who owe student loans after graduation. It’s depressing, and I’m having a lovely day I don’t want to affect by looking up depressing information. However, I will tell you that student loan debt statistics are depressing; most people owe them, most people owe a lot of them and a lot of people cannot afford to pay them back. That’s all you need to know about student loans other than the fact that you should encourage your kids to find any possible way in existence to pay for their college classes without borrowing money from lenders.
If you are ready to graduate or you are about to enter into the repayment period of your student loans, you probably want to know if there is any way at all that you can save. While I cannot magically make your loans disappear (boy wouldn’t I be wealthy if I could?), I can help you find a way or two that might help you save some money and breathe just a little easier in the near future.
Opt to defer your payments
For many people, repaying student loans is not an option at the moment. The financial crisis has left many Americans in a bad place financially, and student loan repayment is a problem. For others, there are other circumstances at play. For example, did you join the military after you went to school or are you currently in the military? If you are an active duty military member, your student loan company is going to allow you to defer your payments. Additionally, you can defer repayment while you work on a secondary degree or a Master’s. You can also defer them if you are in the middle of a national or global emergency, or if you simply cannot make the payments right now while you are out of work.
Just call and talk to someone about this. Student loan companies want you to pay them back, and they are good with helping the people who owe them money afford to make their payments by allowing them to defer for a time.
Opt to have your payments automatically debited every month
Not everyone is a fan of doing this with their monthly expenses, and I’m always shocked that they’re not. It’s so easy to set up automatic payments every month and avoid late fees or forgotten payments. Perhaps that is the busy mom of four in me that knows how simple it is to forget things when life throws you a few curveballs on top of my normally hectic schedule. However, I do know that sometimes you just forget to do things that you never think you’ll forget to do.
One thing that we all forget to do from time to time is to make payments in a timely fashion. Many student loan lenders know this, and that’s why they reward those who are willing to do something for them. Set up direct debits from your account and many lenders will automatically lower your interest rate. That’s a huge amount of savings over the life of a student loan, and we all know this to be the truth.
Call and ask
Are you financially unable to make your student loan payments at the moment? Some people simply cannot afford them for a time, and you can call and ask for some forgiveness. Many loan programs are now offering their customers a chance to save money on their loans by working with them. Did you know, for example, that you can forebear your loans for up to a year while you look for a job or get your finances in order?
Did you know that you can apply for an income-based repayment plan on any subsidized or unsubsidized student loan? This means that you can submit your financial information to the lender and they will tell you whether or not you qualify for a reduced rate to help you repay your loans, sometimes as little as nothing and sometimes even as much as $5 per month in terms of repayment?
The key here is to call your lender and ask. This is for exceptional financial hardship, and it’s going to depend on a number of factors. For example, if you make $50,000 per year and you have several kids to care for, you’ll probably be considered a hardship case. If you make $50,000 per year and it’s just you, you live home with your parents and you have no bills but you want to go to Cancun for a week next month, you’re probably not going to qualify as a financial hardship situation.
You can always call and ask, and many lenders will happily work with you to ensure that you are able to pay at least something in the near future. It’s worth the call; the worst they can say is no.
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