Know What You Owe
It’s likely been some time since you reviewed your student loan statements. If you can’t quite recall how much you owe, the loan terms, or the monthly payment amount, now’s the time to jog your memory.
Start by contacting your loan servicer and making a list of all your federal and private student loans. Jot down these key details so you’ll have a firm idea of the outstanding balances on all your student loan debt. Plus, you’ll have a clear picture of how much more to allocate in your spending plan to payments.
Revisit Your Budget
The next step is to work the payment(s) into your budget. If money’s tight, consider finding ways to increase your income. These include taking on a side hustle, working overtime, or picking up a part-time job. You can also freelance and earn extra income from your gifts and talents.
Reviewing your expenses and identifying ways to free up room in your budget is also a good idea. Look at each expense and categorize it as a need or want. Start with the latter to make cuts - even if only short-term - to make your student loan payments more manageable.
Don’t yet have a budget? Now’s the time to create one. Review your income and expenses, and identify areas where you can make cuts to free up funds. Remember, every little bit counts; small changes can add up over time. Setting aside funds each month in your budget for an emergency fund is also important. That way, your budget won’t suffer if unexpected expenses come up.
You can also use a budgeting app to make the process easier. Or you can request a free financial coaching session to receive personalized guidance.
Explore Repayment Options
Have you tried boosting your income or cutting costs but still can't afford the payments? You could be eligible for a lower, more affordable monthly payment. Be sure to explore different repayment plan options with your loan servicer.
Income-driven repayment plans can be a lifesaver. They use your monthly income and family size to create affordable payments. These plans also consider other expenses in your budget, so you can stay on track with your payments and potentially decrease stress.
The different types of income-driven repayment plans include:
- Income-Based Repayment Plan (IBR)
- Income-Contingent Repayment Plan (ICR)
- Income-Sensitive Repayment Plan (ISR)
- Pay As You Earn Repayment Plan (PAYE)
- Revised Pay As You Earn Repayment Plan (REPAYE)
Refer to the Federal Student Aid website to learn more. Or you can connect with your student loan servicer to discuss your situation. If none of these options work for you, you could look into a deferment or forbearance.
Monitor Your Progress
Start thinking about how you’ll monitor your progress when repayment resumes. Tracking your progress is vital - it will help you stay motivated and adjust as needed.
Once the moratorium ends, regularly assess your student loan balances. Be sure to celebrate small victories to maintain your momentum. You'll be better prepared to tackle your student loan payments with a solid plan. Plus, you'll make progress toward a debt-free future.
The Bottom Line
Remember, managing your student loan debt may feel daunting at first. Still, careful planning allows you to create a budget that works for you and your financial goals. Keep learning, stay informed, and take control of your financial future.
Our team is available to help you get moving in the right direction. Remember, free financial coaching is available to help you navigate the budgeting process. You can also receive personalized guidance on repaying student loans and more.
