How can I manage student loans?

Over half of students leave college with student loans, owing about $30,000 on average.¹ Many parents who help fund their children’s educations also carry debt. Those who take out Parent PLUS loans, federal loans for parents to finance children’s college costs, have average balances of over $29,000 (and that doesn’t include private loans).²

While loans can make a college education possible for yourself or a family member, repaying them can take a toll on your budget and increase stress. Consider these tips to help you manage student loan debt and boost your sense of control.

• Assessing your student loan debt can help you make decisions on how to manage it. Put information about all your student loans in one place, such as an app or a spreadsheet. Include the types of student loans you have, the total amount you owe and the interest rates and repayment terms.
• To find student loan information, log in to your StudentAid.gov account or your loan servicers’ online portals – or talk to loan servicers and lenders directly. If you aren’t sure what student loans you have or who your loan servicers are, request a free credit report at AnnualCreditReport.com to see them.
• Keep track of changes to your student loans and update the information as needed. It’s a good idea to review your student loan details regularly. You should also check them when you’re considering different repayment options or making extra payments.

• Federal and private student loan programs could reduce the number of loans you have, your interest rate(s) and repayment terms (see the StudentAid.gov Manage Loans page for programs and updates).
• Before you apply, review eligibility requirements and compare details; what’s best for you will depend on your situation and goals. Be aware that using these options could cause you to lose benefits associated with your current loans, so consider carefully before you decide.
• Keep in mind that requesting longer repayment terms may lower your monthly payment but lead to paying more interest; opting for a shorter repayment term with higher monthly payments might save you money in the long run.

• Making payments on time will help you avoid extra interest, fees and penalties for forgotten or missed payments.
• You can receive a quarter percent interest rate discount on federal loans and many private ones by having payments automatically withdrawn from your checking account.
• If you don’t have a budget, create one using our tips and worksheet or tools like budgeting apps or spreadsheets.

• Making additional payments could help reduce your total interest charges and help you pay loans off faster. It may not make sense to pay more if you’re seeking loan forgiveness or income-driven repayment, since loans are forgiven after a certain period or number of payments.
• If you decide to make extra payments and can’t do so regularly, consider using unexpected funds, such as bonuses or financial gifts, toward loans.
• Ask loan servicers to apply extra payments toward the principal; otherwise, they may apply the money to future payments.

• Some employers offer student loan repayment benefits; assistance ranges from lump-sum payments to matching your loan payments.
• Check with your HR department or benefits administrator to find out about available programs.

• Setting aside even a small amount toward retirement while you repay loans will give your money more time to grow. That’s important because time allows compounding to boost your savings, meaning your earnings are reinvested to earn more.
• Some employers also match retirement plan contributions up to a certain amount. If your does, consider contributing enough to get the benefit.
• If you’re on an income-driven repayment plan, making retirement plan contributions pre-tax could lower your student loan payments while helping you save more for retirement.

• Borrowers aged 62 and older have some of the highest average balances,¹ which could be due to interest accruing over a longer period or taking out loans for advanced degrees or family members.
• Consider modifying your loans; depending on what you qualify for, it could help you reduce or eliminate loan debt or free up funds for retirement savings or expenses.
• While everyone’s situation is different, some experts suggest putting additional funds toward retirement vs. loans at this stage; a financial professional can help you determine what’s right for you.