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Hey, lady! If you’re feeling like you have no idea how to start dealing with your student loans, don’t worry — student loan help is on the way!
It’s totally normal to feel stressed and overwhelmed by student loan debt. But ignoring the problem will only make it worse.
Taking action, on the other hand, will make you feel empowered and able to deal with your debt, no matter how hopeless it might feel right now.
Whether you don’t know how to pay off your student loans or simply are confused about what to do next, these six steps will help put you back in the driver’s seat.
- Confront your overwhelm
- Track down the details of your loans
- Explore your options for repayment
- Learn about refinancing for lower rates
- Find out if you’re eligible for loan forgiveness
- Come up with a plan
Often, the problem isn’t that you don’t know how to pay off your student loans. Rather, the issue is that you’re feeling way too stressed out and overwhelmed to deal with them.
If this describes you, take a step back from worrying about your loans. It’s more important that you prioritize your mental health and find ways to soothe your anxiety.
Some strategies could be,
- Reach out to friends and family. Let them know what a mental burden your student loans are taking on you, and lean on them for support. Maybe some of them are dealing with student loans, too, so you can help each other figure out the best way forward.
- Consider talking to a therapist. Financial anxiety is a serious issue, and talking to a mental health professional could help. If your insurance won’t cover therapy, maybe you can try an online service that’s more affordable.
- Remind yourself of times you overcame financial challenges. Think about instances in the past where you solved a problem or just totally kicked ass when it came to money. Remember that you have the skills and determination to turn your situation around.
- Join our Women With Student Loans group on Facebook. This group is meant for women to come together to share their wins, setbacks, hopes, dreams, frustrations — you name it. This online student loan help group will make you feel less alone.
- Find affirmations that resonate with you. Whether you tell yourself “My actions create prosperity,” “I am aligned with abundance,” or something else that resonates with you, repeating mantras may shift your mindset and help you go from hopeless to proactive.
Once you’re able to face your student loans, it’s time to figure out what you’re working with. Take some time to track down the details of your student loans, including,
- How much you owe
- What your interest rates are
- Who your loan servicers are
- What your monthly payments are
- How many years your repayment terms span
- How to log in to your online accounts
Rather than guessing or having a vague idea of what you owe, take time to write down all the important details of your student loans. Once you do this, you can start to come up with a plan for tackling your debt.
Next up is to learn about your options for student loan repayment. When you graduate from college or grad school, most loans go on the standard 10-year repayment plan (unless you worked out a separate arrangement with your lender when you originally borrowed).
But 10 years isn’t the only way to pay off student loans. For instance, federal loans are eligible for income-driven repayment plans, extended repayment, and graduated repayment. All these plans are useful if you need to lower payments and get some breathing room.
When it comes to private student loans, you don’t have as many options. You probably already chose a loan term of 10 years or so when you borrowed. But if you’re struggling to keep up with payments, reach out to your loan servicer.
They might be able to work out a more affordable monthly payment to ensure you don’t default on your loan.
On the other hand, you could throw extra payments at your loans to get out of debt faster. You can always prepay your student loans without penalty.
Another super useful strategy for paying back student loans is refinancing. When you refinance student loans, you pay off one or more of your old loans with a new one with a better rate and new terms.
Refinancing can help you save a bunch of money on interest, as well as choose new terms of five, seven, 10, 15, or 20 years.
Let’s say you owe $35,000 at a 6.8% rate. Over 10 years, you’d pay $13,334 in interest. But if you were able to refinance to a 3.3% rate, you’d save $7,194 in interest.
That means way more money back in your pocket. Plus, a lower rate could mean lower monthly payments, which in turn means you might be able to pay your student loans off faster.
That said, only borrowers with strong credit and a steady income will qualify for refinancing (or you can apply with a creditworthy cosigner).
And it’s definitely not a good idea to refinance federal student loans if you’re working toward Public Service Loan Forgiveness, using income-driven repayment, or relying on another federal program.
That’s because when you refinance federal student loans with a private lender, you turn them private, thereby making them ineligible for federal offerings.
If you don’t care about keeping your student loans federal, though, then refinancing could be a useful way to save a bunch of money on interest.
Head here for a list of our recommended lenders — most offer up to $200 back when you successfully refinance.
If you’ve got federal student loans, you might consider working toward a federal forgiveness program, such as Public Service Loan Forgiveness or Teacher Loan Forgiveness.
These programs are especially useful if you’re drawn to a career in public service or are interested in working in a high need or critical shortage area for a few years.
Only federal student loans are eligible for federal forgiveness programs, but some states and even employers offer student loan repayment assistance that you can put toward private or federal loans.
For more info on how to get your student loans forgiven, head to this guide.
Now that you’ve learned about your various repayment, refinancing, and forgiveness options, it’s time to come up with a plan!
Figure out exactly what your goals are, whether you want to,
- Lower your monthly payment
- Make extra payments
- Lower your interest rate
- Refinance your student loans
And get specific. If you want to pay your student loans off three years early, for instance, use a student loan calculator to determine exactly how much extra you need to pay each month to achieve that goal.
Everyone’s financial situation is different, and yours might change as the years go on. But for now, come up with a plan that makes sense for your budget.
Write it down, so that you can have a visual reminder of what you’re working toward. And remember to celebrate your successes along the way.
Paying off student loans can be a long and difficult journey, and you’re not going to get debt-free overnight. But if you can keep your eye on the prize — and pat yourself on the back for all your hard work so far — you’ll eventually reach your destination: a life free of student loan debt.