How To Get Rid Of Your Student Loans
President Biden is willing to forgive $10,000 of federal student debt per student as part of the COVID-19 relief. According to the federal data, that could clear almost 15 million borrowers that owe $10,000 or less. If you owe less than $10,000, you may be fortunate to receive the loan cancellation.
However, you cannot solely rely on this forgiveness. First of all, more than 15 million student loan borrowers owe $10,000 or less. You may not get the loan cancellation. Biden even shot down Democrats’ request to cancel up to $50,000.
A group of attorneys general sent a letter to Congress urging the president to forgive up to $50,000 in federal student debt. But that seems not to be happening any time soon.
However, what you can do is to take matters into your own hands and get rid of your student loans. Especially if your student loan is above $10,000 or you have a private student loan. Yes. It can be a financial nightmare, but it is possible because it has been done before.
This article will give you practical ways to clear your student loan debt.
Let’s quickly go through them.
3 Ways To Get Rid Of Your Student Loans
1. Consider Student Loan Forgiveness Program
The first step to clear your student loan debt goes to you if you have federal student loans. The Department of Education or federal student loan services usually handle these student loans.
The federal authority handles several different student loan programs, including three major and many minor student loan forgiveness programs. The popular one among them is the Public Service Loan Forgiveness (PSLF).
With this loan forgiveness program, you can get forgiveness after working in the public service for ten years. Keep in mind that the public service also includes education jobs, non-profit jobs, and service jobs such as public safety, law enforcement, etc.
The other two common ways to get rid of your loans via federal student loan forgiveness are through teaching and military service. That is the Teacher Loan Forgiveness Program (TLFP) and the military service loan forgiveness. However, the TLFP does not cover much as compared to the PSLF.
2. Find A Repayment Plan You Can Afford To Pay
Find a repayment plan that is in line with your ability to pay. Usually, after graduation, the federal authorities automatically enroll you in the Standard Repayment Plan (10 years of constant even payment). This does not work for every borrower.
The problem is that most graduates do not know they can change the plan. Most people assume it is unchangeable. If you have federal student loans, numerous repayment plans are available to you that can help you manage your debt. That can help you pay off your student loan debts faster.
If you plan for your income for years to come after you graduate, you can consider the Graduated repayment plan. It has a low up-front payment that increases with time. If you want a more down monthly payment but are comfortable paying it for a long time, you can consider the Extended repayment plan.
3. Refinance Your Student Loans
The best way to eliminate your debt if you have private student loans is to refinance them at a lower interest rate. You can save money on interest during the loan life and lower your up-front payment.
One best trick is to refinance your student loans at a lower payment while continuing to pay the amount for your last payment. It can clear off years of your student debt, and that can save you thousands of dollars.
If your biggest problem is income, you may have to make some financial sacrifices. You can get a part-time job on the weekends or some nights. That can help you accumulate cash quickly and direct it entirely on your student loan debt.
You also may have to cut down stuff you can live without for a while. For example, if you have an empty guest room, you can rent it. We recommend doing your research before choosing any of the available options listed in this article.
Some options may work for others, not you. So you need to know the best solution for your loan problem. That may require getting in touch with a student loan expert to help you out. But regardless, it is possible to get rid of your loans.