Getting rid of student loan debt can be much easier than you may think. There are several programs and options available to help you out. Even if you have both private and federal loans, student loan debt elimination is possible. Here are a few things you should know.
Forgiveness Programs
Federal student loan debt can often be forgiven through various programs. Certain fields and careers can be eligible for forgiveness programs. The way this works is based on the program. In most cases you earn money towards your federal loans just by working or volunteering in certain fields. The more time you spend in these fields, the more of the loan is forgiven. This is available to those in teaching fields, medical fields, and those who volunteer through certain government funded programs such as the Peace Corps. These programs aren’t available for everyone, but it’s worth looking in to.
Early Payoff
If you are done with college and in a comfortable place financially, you may be able to pay down your student loan debt early. If you use a student loan calculator you can get an idea of how much extra you should pay each month to get rid of the debt. In some cases sending in just $20 extra each month can help you pay it down faster, and with some programs it won’t seem to matter much. Check to make sure there aren’t any prepayment penalties before you choose to do this. Some loans will have a prepay penalty that is so high that it isn’t worth paying it early.
Consolidating Student Loan Debt
Another option to help get rid of student loan debt is to consolidate. Student loan consolidation will allow you to lump multiple loans in to a single loan. These programs are based on credit, but it’s not weighed as heavily as a typical loan program. If your credit is less than perfect you may not be able to consolidate student loans without a cosigner. It’s still worth looking in to. With private loan consolidation you will shop around as you would with any other loan. Once you find one with terms that are acceptable and an interest rate you are comfortable with you can start the process. The bank will issue you a new loan, but instead of giving you the money the funds are used to pay off existing student loans. Instead of paying the old loans each month yourself, you now will pay back the consolidation loan. The benefit is that you only have to worry about a single payment. Other benefits are that your credit looks better since you don’t have as many outstanding loans. You can also save money by doing this. If you choose a program that will give you flexible terms, you can defer payments during months where money is tight, or pay your debt off earlier when you have extra money. Federal student loans will need to go through their own program for consolidation, but work in much the same way. Getting rid of student loan debt isn’t difficult if you understand the process and options available.