Depending on the school you attended and how long you went there for, your student loan debt might be pretty sizable. Although eliminating this debt can be intimidating, it’s not impossible. By following a few tips, you can get your finances back on track and finally put this burdensome debt behind you.
Make Principal Payments
Many student loan debt holders attempt to get ahead on their debt payments by paying more than the minimum. While this is a good practice, you should take care to ensure that your payments are being applied directly to the principal of your loan. When you make these over-the-minimum payments, contact the loan holding company and specify that this money is intended for the principal of the loan, not as a means of pushing back your next payment due date. Unless you do this, there is no telling how this money will be applied.
Deduct for Savings
When tax time comes, don’t forget to deduct your student loan interest. You can deduct up to $2,500. Earmark the money saved through this deduction to pay extra principal on your student loan.
Take Advantage of Forgiveness Options
Depending on your field of study, you may be entitled to some loan forgiveness. As the Washington Post reports, individuals who enter the public service field after graduation are often entitled to loan forgiveness after a certain number of years of service. If you work in a low-income area, are a teacher or work in the disaster-relief field, explore your forgiveness options, as they could save you a sizable chunk of cash.
Dedicate Extra Cash to Student Loan Repayment
While it might not be the most exciting thing to do with extra cash you come across during the year, applying extra money to student loan repayment is a wise choice. If you get money for a birthday, receive a larger-than-average tax refund or even win some money in the lottery, the financially wise thing to do is pay down your student debt. By following this responsible path, you can cut down on loan-related stress and improve your financial outlook.
Erin Schreiner is a freelance writer and teacher who holds a bachelor's degree from Bowling Green State University. She has been actively freelancing since 2008. Schreiner previously worked for a London-based freelance firm. Her work appears on eHow, Trails.com and RedEnvelope. She currently teaches writing to middle school students in Ohio and works on her writing craft regularly.