Dealing with student loan debt is tough. And when you add in a pandemic and economic crisis, it can be even tougher.
Despite the challenges, there are still things graduating students and those already in the workforce can do to tackle student loan debt.
|See if you have grace||
Some loans offer a grace period of no payment until after you either graduate or stop attending school. Find out if your loan has such a thing and take advantage of that. But use this period wisely – make a budget and start setting at least some money aside so you can be ready for when you have to start making payments.
|Understand your loan||
Review any payment options your lender offers. Some allow interest-only payments or income-based plans if you have no or little income. Some allow for loan forgiveness based on certain criteria. If you have a certain type of federal student loan, you might have some benefits coming to you, courtesy of the CARES Act, the federal stimulus package to assist Americans impacted by COVID-19. The Act suspends some federal student loans, reduces the interest rate on these loans to 0%, and eliminates student loan debt collection on defaulted student loans. Please note, these benefits only last until September 30, 2020, but can still be helpful if you find yourself looking for a job as you graduate.
|Live like you're still a college student||
You may have lived with a roommate to reduce costs or lived frugally – not spending a lot of money on frills. You may have used public transportation. Consider living like this just a little bit longer. This will help you save up money that you can use to pay down your student loan debt.
|Seek a job that helps with student loan debt||
Some employers offer to help pay student loan payments. Others might provide loan debt forgiveness after a certain period of time on the job.
|Consider a consolidation loan||
If you have several student loans, you may have the ability to consolidate into one. While it doesn’t reduce the amount you have to pay back, you’d only have one payment and may be able to reduce the amount of interest charged.
If you can’t make your monthly payments, it’s important you don’t default. Late or missed payments can lead to late fees and even garnishment of wages or income tax returns. It’ll negatively affect your credit score. And you can’t get rid of student loan debt, even by declaring bankruptcy. The best thing to do is to talk to your lender to see what other options are available that you might better afford. If you have a federal student loan and lost your job or are on medical leave, you can temporarily suspend payments.