Would you love to know how to erase student loan debt? If this is it with you, then you are on the right page. Continue reading to know everything you need to easily and effectively erase your student loan debt.
How to Erase Student Loan Debt
Getting a college degree is seen as one of the key components of the American dream. But we all know that very achievement at most times comes at a steep cost. According to the US News data, the average student loan debt is around $30,000. For borrowers on the other hand who got to attend graduate or professional schools, that very figure may get to run into six figures.
Burdensome amounts of college debt can easily and effectively hold you back from other financial goals such as buying a home or even saving for retirement. However, there are a couple of ways to pay off student loan debt quicker – and while saving money in the process. With that being said, here are some strategies for repaying your student loans, so that you can now get your finances back on track. Below are some of the tried strategies to erase your student loan debt and get your finances back on track;
- Enroll in an income-driven repayment plan
- See if you qualify for student loan forgiveness
- Pay down extra cash toward the main principal
- Consolidate multiple student loans into one single payment
- Refinance your student loan at a simpler and lower rate
- Explore deferment and forbearance options
- Lastly, file for bankruptcy
Enroll In an Income-Driven Repayment Plan
Borrowers that have federal student debt have direct access to four types of income-driven repayment plans all depending on the type of federal loans that they have and they are;
- Income-based repayment plan
- Pay as you earn repayment plan
- Income-contingent repayment plan
- Revised pay as you earn repayment plan
Under all of these mentioned programs, your monthly payment will be limited to between just 10% and 20% of your discretionary income, but based on your family size and also on the type of IDR plan that you choose. And besides the obvious benefit of increased affordability, perhaps the most important aspect here is the potential for student loan forgiveness down the line. And after a repayment period of 20 or 25 years, your remaining debt balance will be ultimately discharged.
See If You Qualify For Student Loan Forgiveness
If it is that you have federal student loans, then you could just be eligible to have some or all of them forgiven via certain debt forgiveness programs. And in addition to income-driven repayment plan forgiveness, here are a couple of federal programs for which you may qualify:
- Public service loan forgiveness
- Teacher loan forgiveness
- Total and permanent disability discharge
- Closed school discharge
- Borrower defense to repayment
Consolidate Multiple Student Loans into One Payment
For federal student loans;
Borrowers with several federal student loans which is inclusive of those from different loan servicers – can easily combine their debt into one loan with just a single monthly payment through a Direct Consolidation Loan. Many types of federal student loans are eligible, and this is including subsidized and unsubsidized Direct loans, graduate PLUS loans, parent PLUS loans, Stafford loans as well as PLUS loans from the Federal Family Education Loan Program.
For private student loans;
Private student loan borrowers as you should know aren’t eligible for a federal Direct Consolidation Loan, but it is however still very much possible to combine multiple private student loans into one. This can effectively streamline your debt repayment process, thus making it easier to budget for your monthly payments.
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