Student Loan Debt Help
Repaying Your Student Loan Debt
The average college student graduates with $19,000 in student loan debt, but many carry
up to $40,000. For students continuing on to professional or graduate school, or those
who attended top-tier schools, the tally can top $150,000. The simple fact is that student
loan debt repayment can’t be permanently avoided, but there are several ways to take the
sting out of the monthly bill. Below are some student loan debt help solutions and advice.
Pre-Pay Student Loan Debt
If possible, repay some of your student debt before you graduate or your interest deferral
period ends. Early payments for subsidized loans are applied to the principal, which
reduces both your principal balance and the interest you pay over the life of the loan.
Payments toward unsubsidized loans are first applied to accrued interest, but that can also
reduce the life of the loan and save you money in the end.
Consolidate Student Loans to Create New Payment Options
Federal student loans issued before July 1, 2006 have variable rates, which means the
interest rate resets annually on June 30. Federal loans issued after that date have a fixed
If the current interest rate on your federal loan is variable, consolidate the loan to lock in
a fixed rate. Consolidating fixed rate loans also has advantages, including the ease of a
single monthly payment. Many lenders also offer bonuses for consolidation such as a rate
reduction of .25 to 1% after a number of on-time payments, and possibly an additional
.25 to .50% rate reduction for automatic payments.
In addition to the potential rate reduction of up to 1.5%, most consolidation loans include
choice of repayment plans. Repayment plans determine your payments by dividing the
principal plus total interest by the life of the loan. The amount of the payment depends on
the plan you choose:
* Standard repayment – equal payments for the life of the loan, usually ten years.
* Extended repayment – equal