Student Loans Options in 2023
We’ve heard from many of our members that paying down student loan debt is a major financial goal.
Managing student loan debt can be stressful, we get it…
About one in five U.S. adults have student loan debt, with the average balance owed being $28,950. In a 2022 survey, 54% of 2,000 respondents said that student loans impacted their mental health. So it’s understandable that paying down the debt or managing the debt is a big goal for many.
Here are some steps you can take to manage your student loans:
Know your loan(s)
From private loans to federal loans; FFEL loans to DIRECT loans; undergraduate subsidized and unsubsidized, graduate PLUS, and Parent PLUS, there are many different types of student loans out there, each with its own repayment obligations. There are also many different loan servicers and creditors. Knowing the details of your goal will help you determine the best repayment plan for you.
Log in to your Student Aid account to find out more information about your federal student loans.
Update your contact information with Student Aid before repayment begins
Set a repayment goal
Identify whether your main goal is to pay off the debt within a certain time frame or whether your goal is to manage the amount of your monthly payment. Both of these goals are equally valid, and it’s okay if one takes priority over the other at this moment.
There are several online student loan calculators that can help you determine how long it will take you to pay your student loan(s). We like this one from Bankrate and Student Aid
Tip: review your budget to make sure your payments are feasible and don’t strain your budget
If you have a federal student loan
Payments are currently on pause while the U.S. Supreme Court resolves the current student loan debt relief case. Still, this is a good time to review Income Driven Repayment (IDR) plans in advance to prepare for repayment. These plans offer affordable repayment plans based on your income and can be as low as $0.
President Biden recently introduced a new IDR plan that will be more affordable. However, the Student Aid student loan repayment stimulator does not currently have this plan included. The calculator should be updated by summer and before repayment starts.
Note: If you have federal student loans, think twice before you consolidate your federal loans into a private loan as you may lose many federal protections and eligibility for federal loan forgiveness.
One Time IDR Count Adjustment
The Department of Education will conduct a one-time adjustment of IDR-qualifying payments for certain federal loans. Any borrowers that have accumulated eligible time in repayment of at least 20 or 25 years will see automatic forgiveness. Be on the lookout for any communications from the Department of Education and your loan servicer.
