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Paying down your student loans is a daunting task. Good thing is, the government has released one of the largest student loan forgiveness packages ever (around $2bn), so it's time to check your eligibility. Here are the 4 things you can do to pay down your student loan debt quicker, cheaper, and with less stress:
Setting up auto-pay is one of the best things you can do to make sure your student loan payments are on auto-pilot. Besides Navient (the largest student loan servicer), or Myfedloan, you can also download a student debt payoff app. ChangED and Chipper allow you to track your loans and round up your expenses to the nearest dollar, and put the change towards your loan.2. Refinance your student loan if your interest rate is high
If you're paying an expensive private loan (7% interest or above), consider refinancing your student loan to a lower rate (5% or lower). Here are a few companies that offer credit card refinancing - we would compare rates between all of them or go to Sparrow Finance or Nerdwallet to find the best rate:
You may be eligible for student loan forgiveness through various government programs, such as PSLF (for public sector/non-profit employees). Chipper (mentioned previously) should be able to identify your eligibility under the plan and help you apply for debt cancellation.
If the monthly payment is a bit much for your budget, you can set up an income-driven plan where your monthly payment is tied to your income (i.e. the smaller your income, the smaller your monthly payments but the longer the timeline). In times when you're unemployed, you will owe $0, though you will still continue accruing interest. This option provides more flexibility and accommodation to your unique employment needs, but can also mean delayed payoff.
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The Biden administration has recently rolled out a new student loan repayment plan called the Saving on a Valuable Education (SAVE) plan, designed to be more affordable for borrowers, with lower monthly payments and the potential for loan forgiveness after as little as 10 years.
On today's Ask Debbie, we talk about paying off student loans.