7 Ways To Stay On Top of Your Student Loan Payments

It seems that the ultimate goal of this generation is to finally be rid of the burden of repaying our student loan debts. Since last year, more and more college grads have fallen further and further behind in making payments according to data released by the Department of Education. Despite promises by the federal government to lessen the burden, many graduates are continuing to fall into delinquent or default status with no end in site. Although it was expected that relief would come with an increase in the number of loan borrowers, many are still not in a financial situation comfortable enough for them to afford their total monthly payments.

This news is even more troubling considering the so-called ‘improving’ US economy that is introducing more jobs to the market and experiencing higher workers’ wages. The number of seriously delinquent accounts has raised an entire 1.6% since June of last year, which may not seem like much as far as percentages go, but in terms of actual numbers, that means that around 5 million borrowers are dealing with delinquent accounts.

If you are one of these borrowers, or, like me, you simply find it a struggle to pay the full monthly amount, here are 7 tips to help you stay on top of your student payments:

1. Try to make your grace period

Student loans are frustrating in-and-of themselves, but having additional fees tacked onto your monthly bill is even worse! Most private companies and federal loan providers have some kind of grace period attached to your repayment schedule. Usually grace periods range between 10-20 days after the payment due date. Be sure to check with your loan provider about how long your grace period is for each loan and do your best to stay within it in order to avoid paying more than you need.

2. Your lender can help

I know, from personal experience, what it’s like to have your loan providers calling you about past due accounts, but calls from collection agencies are even more unsettling because you know your credit can start to be affected. Work with your lender to resolve your repayment issues; they will, at least, have some options to provide you about your repayment status, but a collection agency will continue to call until you settle the debt.

3. Understand how much you owe

Knowing your total amount of debt and your current income and additional expenses can help you determine how much you can afford to repay each month. Most standard federal loans are automatically set up with a 10-year repayment plan. If necessary, you can opt to extend your repayment period in order to lower your monthly payments, but some providers work differently than others, particularly private companies like Wells Fargo or private banks.

Check with your loan provider as to your repayment schedule options and let them know your current income so that they can help determine an appropriate plan for you. Some options they may recommend include Income-Based Repayment or Pay-As-You-Go plans. Whatever the case, be sure to stay on top of your repayment schedule and keep in touch with your provider, no matter how painful the process may be.

4. Don’t ignore the problem

Dealing with monthly bills and expenses is enough to drive you crazy, let alone having to pay your student loan bills. Ignoring the problem, however, is never a good solution. You need to be aware of your loan status at all times. You also need to do your best to avoid being reported to a collection agency because you have not made any payments for several months. Even if you only pay a small amount of the total bill, say $20 for example, this will prevent you from default status, but you should not view this as an appropriate solution because you are continuing to accrue interest and you may still be charged for making late payments.

5. Consider consolidating your loans

Federal student loans can be consolidated into a single monthly payment, usually with a fixed interest rate. If this is an option that seems appropriate for you, be sure to discuss it with your loan provider. You should be aware, however, that consolidation is not always an option. If you have loans from a variety of different companies, for example, you may not be able to consolidate all of your loans into a single payment.

6. Reduce your interest rate

There are several ways that you can reduce the interest rate on your loans, some of which are provided by your provider and others that you can do yourself. Wells Fargo, for example, will lower your rate when you graduate with your degree, but you have to call them and enquire about it because they will not do it automatically, even though they should receive copies of your transcript and educational status. Other ways to lower your rate is to consider refinancing. If you have a steady job and are making up to $1000/month more than the monthly amount that you owe, you can refinance your debt and get a lower interest rate.

7. Don’t panic

We are all in this together, so whenever you think to yourself, “How am I going to do this?” remember that you are not alone. In today’s world, unemployment and financial stress seem to be the norm among people of the ‘now’ generation. Keep your head up and don’t be afraid to ask for help. You can also consider options like forbearance or deferment. This can, again, vary from company to company, but federal providers are often willing to consider these for a certain period of time.

When it comes to repaying your student loans, treat it like you would one of your life goals. Make a plan for yourself based on your current income, employment status, and additional expenses. Once you understand your financial situation you can begin to work towards resolving your debt. When you begin to bring in a more steady income, you can also begin to repay in larger amounts, so that you are not stuck repaying interest for the entire life of the repayment schedule. There is light at the end of the tunnel. Stay the course, and you will, one day, achieve your goal of being free of your student loan debt.