Once you have achieved your goals of graduating college and pursuing a fulfilling career, the last thing you want to deal with is the stress of poorly managed student loan debt.
Your personal expenses alone can seem daunting. When you add a student loan payment that you haven't thoroughly accounted for, you may be headed for financial disaster. Managing your student loan debt is not an insurmountable task. Avoiding to deal with your student loan debt will not fix the problem. Face the problem head on. Here are some options to help you stay on top of student loan payments so that you can enjoy life in your new career.
Create a Budget
First, track all of your spending for a month by keeping all of your receipts. At the end of the month, place these receipts into two categories; fixed expenses and variable expenses. Fixed expenses are those that do not change from month to month like rent, car payments, and insurances. Variable expenses can change from month to month and include entertainment, groceries, restaurants, and recreation.
You can save money on fixed expenses by downsizing your car, shopping around for cheaper insurance, getting another roommate, and cutting premium cable. Save on variable expenses by cutting back. You can limit how much you go out to eat, bring your lunch to work, and brew your own coffee at home instead of going to Starbucks. Although these changes are small, they will make a big difference in the bottom line of your savings. Use RISLA's budget calculator to come up with a plan.
Forbearance and Deferment
Deferment is when the principle and interest payments on your loan are temporarily delayed. If you qualify for a deferment or forbearance, you will not have to pay on your loan for the duration of the deferment or forbearance - or your payment amount will be reduced. This will be a great time to get financially stable and prepare for when it's time to pay on the loan. If you are in the military, still in school, or going through a financial hardship, these are great ways to take a load off and get back on track. Just call your loan servicer to see what programs are available to you based on your individual circumstances.
Income Based Repayment
You can make your student loan payments more manageable with an income based repayment plan. All federal student loans offer some sort of income driven payment plan although the program names vary (Pay as you Earn, Income-Based Repayment, Income-Sensitive Repayment and Income-Contingent Repayment) to make repayment easier. Non federal Rhode Island Student Loan Authority loans are also eligible for RISLA's Income Based Repayment Program. Monthly payments will be determined by the borrower's discretionary income and family size under these options. If you are having trouble making your payments, contact your lender and see if you can take advantage of an income-driven repayment plan.
Full time public service employees may be eligible for the Public Service Loan Forgiveness Program. If you have made at least 120 qualifying student loan payments on your Direct Loan while employed by designated public service employers, contact your loan servicer to see if you qualify and learn how to apply. RISLA also has rewards programs for nurses, nurse educators, a loan forgiveness program for interns.
Ask For Help
After you have taken the necessary steps to manage your student loan debt but are still under water, seek help from family. If you are graced to have parents that can help, don't be afraid to turn to them. Bring documentation to show all of your efforts (how you've cut back and reduced your budget, for example) and discuss forms of repayment at a later time. Keep in mind that you may hear some undesirable advice like moving back home. If your parents are willing to help, be respectful enough to listen to sound advice.
Keep in mind that federal loans generally have more flexibility and options so begin working out arrangements there before moving on to non-federal loans.
Manage your RISLA loans here and get on the road to financial freedom!