When we first began crunching the numbers, we were certain that student loans were just going to be part of our lives. We didn’t see any way around them without throwing tons of money at them. While we were right about the loans sticking around, we were pleasantly surprised to find solutions that are making pay-off less stressful.
If your monthly payments are taking up a huge chunk of your paycheck, chances are your debt-to-income ratio could be looked at. When I left the classroom, our monthly income was cut in half but our loan payments stayed the same. Fortunately, we were told about income-based repayment. In this form of repayment, your lender looks at your monthly income and decides what a more affordable payment would be. While my private lender was unwilling to work this out with us, my federal lender was great. After a pretty simple process of filling out paperwork, our monthly payment was cut by more than half! In addition, they put my repayment on hold while they were filing paperwork so that we had a month or two of saving our payment.
As I said previously, my private lender did not offer any other form of repayment. So, our next step will be consolidating this loan with a different company at a rate we can afford monthly. I was disappointed at first, but this will actually help us out even more because my private loan interest rates are much higher than my federal loan rates. Consolidating will help us out in two ways!
I wish I could tell you that we found a magical way to get rid of student debt. But the truth is, I knew that if I wanted to go to college I would have to take out these loans. I went to school knowing I’d be paying them back later, and am now dealing with the consequences of that decision. Such is life, right? Although we’ll be seeing these loans for a while, these strategies have helped ease the financial burden of my student debt. I hope that they can do the same for you!