How To Manage Your Student Loan Debt

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

It's not unusual for college students to push their student loans to the back of their minds during their years in the classroom. However, once graduation day comes and the months following start to fly by, the need to start paying back those loans becomes more and more real. 

As financial planning professionals who have gone through a similar experience ourselves (not to mention, we've watched many young adults go through the same thing, including our own children), we know that student loan debt can be pretty intimidating to face. The good news, though, is that managing student loan debt doesn't have to be as difficult as it seems, and that's regardless of how much you owe.

Five Tips For Managing Student Loan Debt

1. Know your loans. You would be surprised at how many students come out of college not knowing how many loans have been taken out in their name over the years. Don't make the same mistake - in the months leading up to graduation or right after, familiarize yourself with your account balance so that you know what you'll be facing once your grace period is over.
2. Choose an appropriate repayment option. The time you have to pay back your student loans may automatically be set up by your loan provider, however, the time that they suggest may not be the most realistic for you. To ensure that you aren't living out of your means, research the different repayment plans offered and, if need be, change yours to something that makes you feel more comfortable. 
3. Start with the highest interest rates. When creating a strategy for how you'll pay off your debt, start by looking at the loans with the highest interest rates. Especially if high interest rates are applied to loans with high balances, you'll want to pay them down as quickly as possible so that they don't cost you any more than necessary.
4. But don't forget about the principal. If you want to reduce how much interest you pay over the life of your loans, a common strategy is to focus on paying more in principal. This is because interest is determined by the principal amount, so the lower that is, the less interest you'll be charged.
5. Be open to communicating. Have questions about your loans or need help figuring out how to go about paying them back? If so, don't hesitate to reach out to your loan provider or other financial professional. Utilizing your resources and being open and willing to communicate can be the difference between paying your debt back on time (maybe even early) or making late payments.

Are you at the time in your life where student loans are about to become a monthly expense?  To figure out a financial strategy that will benefit you the most, email info@americaninvestmentplanners.com to set up an appointment with one of our advisors!