One of the biggest challenges of going to college is the cost. Aside from tuition fees, you must set aside money for school supplies, food, and other living expenses.
Unsurprisingly, many students in the United States turn to student loans to finance their studies.
The student loan debt in the US currently totals $1.727 trillion, with an average balance of $37,088 per person.
While this is a systemic problem, individuals often suffer from these debts. Therefore, taking a proactive stance toward managing one’s student debt is essential. This post explores helpful strategies and digital tools you can utilize for that purpose.
Digital Tools To Help With Your Student Loans
Managing your student loans is crucial to securing a more stable financial future.
Many digital tools are now available to help students manage their budgets and get a better handle on their student loans.
Here are four tools you can consider to help you in your debt management journey:
ChangED
ChangED is an app designed to help borrowers repay their student loans faster.
The concept is simple but can significantly improve your debt repayment efforts. The app rounds up everyday purchases to the nearest dollar and applies the spare change toward your student loan debt.
This micro-payment approach can significantly reduce the principal amount you owe over time. As a result, you can save money on your interest payments and reduce your payment term.
SoFi
SoFi, short for Social Finance, offers a comprehensive suite of financial products and services. One of its most helpful offerings is student loan refinancing.
They can help you refinance student loans and find ways to lower your monthly payments with more flexible terms.
Their user-friendly website and app provide borrowers with a one-stop solution for managing their student loans efficiently. It also allows students to access other financial services like investments and banking.
EvoShare’s approach lies in the power of cashback rewards. Through their platform, you can gain cashback from various purchases, which you can use to pay off your student loans automatically.
Users can earn up to 20 percent cashback on purchases from over 1,200 of their partner merchants. This way, you can use your everyday spending to contribute to your loan payments.
Mint
Mint is a personal finance app offering budgeting tools, expense tracking, and goal-setting features to help people manage their finances effectively.
While the app isn’t specifically tailored for student loans, it can be valuable for organizing your finances. It also helps you find opportunities to improve your student loan repayment strategy.
Strategies and Tips To Manage Student Loans
Navigating student loan obligations can be challenging. However, with proper strategies and tools, you can gain control over debt obligations and pave the way toward financial freedom.
Here are some effective strategies and tips to help you manage your student loans more effectively:
Refinance Or Consolidate Your Loans
Consider refinancing or consolidating loans to potentially secure a lower interest rate and simplify repayment processes.
Refinancing allows you to replace your current student loans with a new loan, usually at a lower interest rate and adjusted terms.
On the other hand, consolidation involves combining multiple loans into a single loan, which can be helpful if you have multiple debts going on at the same time. This strategy makes it easier to manage and lower your monthly payments.
Apply For Government Debt Relief Programs
Government debt relief programs offer various options to help people manage their student loan debt more effectively.
These programs provide financial assistance and relief to those struggling to keep up with their loan payments.
Some standard debt relief programs are public service loan forgiveness, income-driven repayment plans, and teacher loan forgiveness.
Explore these different programs to see which ones you could qualify for, as they can make your student debt easier to manage.
Explore Student Loan Forgiveness Options
Loan forgiveness programs allow borrowers to have their debts forgiven, usually after meeting specific eligibility criteria.
That means you may no longer have to pay off the remaining balance of your student loans.
Some government agencies, non-profits, or specific employers offer these programs as an incentive. It’s commonly given to those who work in public service and particular jobs or industries.
Seek Alternative Repayment Plans
If you struggle to make your monthly payments under the standard repayment plan, you can consider alternative repayment options.
Contact your lender to see if you can work out an alternative repayment plan that better suits your financial situation.
For example, you can opt for an extended payment term, stretching out your balance over a longer period to lower your monthly payments.
You can also ask them to consider an income-based plan, which accounts for your current income.
Use The Debt Avalanche Strategy
The debt avalanche strategy is a powerful method for efficiently paying off student loans and minimizing interest costs. It is handy for situations where you’re juggling more than one debt at a time.
With this approach, you prioritize paying off the loan with the highest interest rate first while paying the minimum on all other loans.
Once you pay off this debt, you can redirect your funds toward the loan with the next highest interest rate.
Focusing on high-interest loans allows you to save money on interest rates and pay off your loans more quickly.
Take Control Of Your Financial Future
Managing student debt amidst hard financial times can be incredibly challenging.
However, it’s essential to take control of your situation and find ways to make paying off your student debt more manageable.
With careful planning, opportunities, and the right toolkit, you can lighten your load, become debt-free, and achieve financial independence.
Written by Allison Langstone
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