May 21, 2012 

So you just graduated! Yay! You have your cap and gown...and a mountain of student loan debt!! Wait. OK, so there is more to this whole graduating thing than you expected. But you can simplify your loans and pay them off more rapidly. Here’s how: 

  1. Consolidate your loans for simplicity – You may not get a lower interest rate but you will get the convenience of having just one payment to make. Cutting down on managing multiple accounts makes it easier to avoid late fees and keep up with due dates. For more information check out www.finaid.com.
  2. Check to see if you qualify for the Obama Special Direct consolidation program – This new program started in January 2012 and is available through June 2012. If you qualify, you can consolidate your loans and get a 0.25% reduction in interest rate. You can become eligible for another 0.25% interest rate reduction if the loan is repaid through an automatic debit system. For more information on the program and to see if your loans qualify visit this site.
  3. Make additional payments – By making additional debt payments every month you may be able to pay off your student loan a lot faster.  For example, if your student loan balance is $10,000 with an interest rate of 6.8% and minimum payment of $115 per month, it will take you 10 years to pay off the loan.  If you add another $100 to your monthly payment for a total of $215 per month it will take 4.6 years to pay off the loan.  Also, by paying $215.00 per month instead of the calculated payment of $115.08, you save $2,169.12 in interest charges.
  4. Get someone else to pay – I like this one. There a lot of occupations now offering to pay off your student loans as a recruiting tool. Programs such as AmeriCorps or Teach for America also offer grants to help you pay off your loans. Teaching in a low-income school may also qualify you for loan forgiveness.
  5. And don't forget: If you meet income requirements, you can deduct up to $2,500 per year in interest on any loans used for higher education.


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When dealing with debt, the best thing you can do is educate yourself about your options. Do your research and then work on paying your student loans down step by step. Soon you’ll be able to pay them off and focus on the bright future ahead of you. 


Brittney Castro is not affiliated with MadeWomenMag.com. Brittney A. Castro is a registered representative with and securities offered through LPL Financial, Member FINRA/SIPC. California Insurance License #0F33895. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.




Published in Personal Finance