Image Credit: Tracy O

According to the College Board, approximately 35% of undergraduate students take out federal Stafford Loans, including 50% of full-time undergraduates.  And, among bachelor’s degree recipients, 66% graduate with student loans.  These statistics are staggering, but reflect the growing trend of our students – higher education is burdening our young adults for decades to come.

In order to better manage your student loans, consider the following.

• Borrow only what you need to.  It is tempting to maximize your borrowings when someone is offering you “free” money.  It’s not free.
• Know your loan details – principal balance, payments and interest rate. If you don’t know the information, go to the National Student Loan Database.   Knowing the specifics will help you make decisions about the best way to manage your debt.
• There is no easy answer for whether or not you should consolidate. You need to consider your current interest rates and payment terms and determine whether or not a consolidation offers you better terms. Consolidation will offer you lower payments at the cost of extending the loan term, which means more interest.
• Don’t lose out on an opportunity to have some of your loans forgiven. If you work in public service, teaching or are in the military, see if you qualify for the loan forgiveness program.
• If you can’t make your loan payments, talk to your lender. Do not put this off. Your best solution will always be dealing with your lender directly and upfront.
• Set up automatic payment for your student loans. This will ensure that you are building good credit as you pay off your student loans.
• Determine whether you have any loan enhancements such as a reduction in your interest rate if you make a certain number of on-time loan payments.  This could save you big.
• If you are considering forbearance or deferment, do it before you go into default or you will not be able to.
• Remember, depending on the type of loan, you could still be accruing interest during a forbearance or deferment. So, consider whether it really is the best solution for you. If you are accruing interest without making payments, you are digging a deeper hole. That said, if you are going to default if you don’t get a forbearance or deferment, take it if you can get it.
• One of the best ways to save money on your loans and pay them off more quickly is to make additional monthly principal payments. You could save thousands of dollars and years of payments. See what a difference even $20 a month can make using the WilliamPaid Student Loan Calculator.
• If you have the ability to pay extra each month on your student loans and have multiple loans, make sure that the extra principal amount goes toward the loan with the highest interest rate.
• Get free money toward student loans by using the WilliamPaid Cash-back program by shopping for your apartment and referring friends.  WilliamPaid will even provide a 10% matching contribution when you apply your cash-back to your student loans.  Parents can even help you out – at no cost to them or you – and increase your cash-back.