Our Blog

Strategies for Managing Your Student Loan Debt

Unfortunately, the “hair of the dog” won't cure this headache, but here are some ideas for managing your student loan debt.

The programs listed are not intended as tax or legal advice. They may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The programs are for informational purposes only, and should not be considered a substitute for a more comprehensive student loan evaluation.

Income-Based Repayment Programs

If your payments on eligible federal student loans are in excess of 15% of your earnings above 150% of the poverty level, you may be eligible for an income-based repayment program. Under this program, your outstanding loan balance may be forgiven after 25 years of qualifying repayment.

Another program, Pay As You Earn (PAYE), also caps repayments based on your income and will forgive outstanding federal student loans after 20 years. Under PAYE, payments must exceed 10% of what you earn above 150% of the poverty level, under a standard 10-year repayment plan.

To be eligible, you must have taken your first federal loan after September 30, 2007 and at least one loan after September 30, 2011.

Public Service Loan Forgiveness

Certain federal loans may be forgiven after 10 years of qualifying payments if you take a job with federal, state, or local government; a non-profit; or other public service organizations.

Volunteer

There are a number of programs, such as AmeriCorps, Peace Corps, and the military, in which service will accrue a benefit that reduces an outstanding loan balance in an amount that varies depending upon the program.

Pre-Pay Principal

Pre-payment of principal may help lower the lifetime interest costs of a loan. To raise cash to fund pre-payments, one idea is to ask that birthday and holiday gifts be cash to put toward pre-payments. You could also direct any raises, bonuses or overtime pay to pre-payments. If you do pre-pay principal, be sure to target the loans with the highest rate of interest.

Loan Consolidation You can consolidate your federal loans through the Direct Loan program, or through a private lender if you have private loans. However, this may only make sense if you can obtain an overall lower interest rate.

Back

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2016 FMG Suite. 

DISCLOSURE: Investment advisory services are offered through Gretchen Stangier, Inc. DBA Stangier Wealth Management (“Stangier Wealth Management”), an investment advisor registered with the U.S. Securities and Exchange Commission. Stangier Wealth Management only offers investment advisory services where it is appropriately registered or exempt from registration and only after clients have entered into an investment advisory agreement confirming the terms of engagement and have been provided copies of the firm’s ADV Part 2A brochure and Part 3 documents.

DISCLAIMER: This website is for informational purposes only and does not constitute a complete description of our investment services or performance. This website is in no way a solicitation or offer to sell securities or investment advisory services except, where applicable, in states where we are registered or where an exemption or exclusion from such registration exists. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS OR ANY ‘LINKED’ WEBSITE.

You may also like

The Economic Journey of Your Morning Coffee

This morning 100 million Americans began their day in the same way—drinking their first cup of coffee.¹ Few, if any,…

The Five Basics of Financial Literacy

Credit and debt Understanding the ways credit and debt work for and against you are some of the first steps…

Strategies for managing your student loan debt

Struggling with student loan debt? Learn five strategies that may help manage your debt and save your money.