Hot take: Student loans aren’t all bad (just hear us out, k?). For one thing, they provide an opportunity for students to afford something they otherwise couldn’t afford. And it’s not like you’re going into debt over the latest Gucci bag or iPhone here. You’re investing in yourself and your education, which actually makes sense financially.
Of course, it makes even more sense to treat student loans as a last resort by applying for college scholarships, grants, and other sources of free money first. But what if you’ve already done all of those things and still find yourself facing the prospect of taking out student loans?
Don’t worry, there are some ways to ease the burden of student loan debt. Below, we’ll show you how to reduce student loan debt — and, hopefully, some stress along with it!
Related: How to Go to College for Free
1. Sign Up for Auto-Pay
First things first: Consider signing up for student loan auto-pay. This feature authorizes your student loan lender to withdraw monthly payments from your bank account. Autopay has several benefits, one of which is that it typically results in a .25 percent reduction in your interest rate.
By setting up auto-pay, you can save on interest over time. However, there are some downsides to automatic payments. If your bank account is running low, auto-pay could try to pull money that isn’t there, resulting in an overdraft fee.
2. Start Making Payments Early
Most student loans have what’s known as a grace period, which is the time between when a student graduates and when they need to begin making payments. While you obviously don’t have to pay student loans early, doing so could save you literally thousands of dollars by reducing the amount of interest that builds up on your student loans.
So, if you can afford it, start making small payments during your senior year in college. Consider taking on a side hustle in college and putting as much money as you possibly can towards your student loans.
3. Get Help from Your Employer
While some employers have benefits like free snacks and carbonated water machines, others are literally so generous that they’re willing to help you pay off your student loans. Yep, seriously!
Government employers typically have loan repayment assistance programs. Even private companies, such as Estee Lauder and Fidelity Investments, have benefit programs designed to help their employees chip away at their student loans.
Ask your employer about a student loan repayment program. Who knows? They might be more generous than you think.
4. Continue to Apply for College Scholarships
It’s not too difficult to find college scholarships for high school students. But did you know that you can continue to apply for scholarships while you’re in college? It’s true! As long as you meet the scholarship’s eligibility requirements, you can apply for it as a college student.
One of the best types of scholarships a student can get is a renewable scholarship. This is an award that doles out money over the course of your education. Don’t forget that you can also apply for Federal Pell Grants, which are awarded to undergraduate students based on their financial need.
Still in high school? Look into applying for the National Merit Scholarship. Although the National Merit $2,500 scholarships aren’t renewable, the college and corporate-sponsored Merit scholarships are renewable for up to four years.
5. Consider Refinancing
With interest rates near record lows, now could be an excellent time to refinance your student loans. Like other student loan-reducing strategies, refinancing can help save you money in the long run by lowering your total interest payments. However, this interest-saving tactic isn’t an option for everyone. You usually need to have a steady income and a good credit score to be approved.
6. Look for Loan Forgiveness Programs
While you can’t make your student loan debt disappear with the snap of a finger, you can potentially eliminate a significant amount of student debt with a loan forgiveness program. These programs are commonly available to people who work full-time in public service and who have made a certain number of payments on their loans.
Some lenders also offer deference, which allows you to temporarily stop making payments on your loan. Although deference won’t save you money on your student loans, it can be a huge stress-reliever if you’re struggling to make payments!
Moving Towards a Debt-Free Life
Student loan debt can be overwhelming and stressful. The good news is that there are many ways to reduce the overall amount of debt you owe. With smart budgeting, the right program, and determination, you can avoid getting crushed by student debt and take control of your life.