Student Loans 101: Managing Your Student Loan Debt

Why Financial Education is Key

As a new school year starts, financial experts say students (and their parents) need to educate themselves on all the lending options available in order to avoid the type of debt that can hold them back financially. This includes understanding what the interest rates are on the existing student loan debt, knowing what the monthly payments will be, and the length of time it will take to pay them back.

Another important factor is to anticipate the job market when it comes to choosing a degree. Find out the average pay rate versus the cost of living and make sure to include the student loan payment cost.

If you do find yourself saddled with student loan debt, here are tips to help pay them down:

• Refinance. Consolidating and refinancing your loans can help you pay off your loans faster. Credit unions typically offer lower interest rates on loans.
• Use a cash windfall. If you suddenly come across extra money from an inheritance or settlement, use part — if not all – of it to pay down your student loan debt.
• Student loan forgiveness. Investigate job opportunities with companies offering student loan forgiveness. Certain jobs, such as public service work or teaching, may offer forgiveness for part or all of your student loans.
• Pay more. Any time you can do so, consider making more than the minimum payment each month, even if it’s only $10 or $20. Anything extra will go directly towards the principal, which means less interest owed in the long run.
• Get educated. Financial institutions, such as credit unions, can be a good source of information. Wescom offers free financial education modules through the Financial Education Center on the topic of college funding or lending.