For example, you could apply part of your yearly bonus from work or a tax refund to your debt, said Brian Walsh, a certified financial planner and financial planning manager at SoFi. Or you could participate in a challenge like dry January or a no-spend month to come up with the extra cash. It might feel painful to put something fun like a cash windfall toward your student loan debt, but the results can be dramatic.
When it comes to Stafford, Perkins, PLUS, and Direct Consolidation loans—which make up 85 percent of education debt—there are five repayment options. They range from the standard plan, which requires a minimum payment of $50 every month for up to 10 years, to the new, income-based plan that caps your monthly payments at a “reasonable percentage” of your income (determined by the federal government)and forgives any debt remaining after 25 years. So which schedule is best for you?
Private loans are typically made through private banks, credit unions, state agencies, or financial institutions. They may have rates and terms that are different from federal loans. If you’re considering applying for a private loan, be sure that you’ve taken advantage of all federal aid opportunities first. There are two types of private education loans:
Say, for example, you have a couple with a combined college debt of $50,000. Annually, they are making $100,000 combined in salaries. By establishing a budget with a goal of 3-years completion, they can make the necessary adjustments in their day-to-day spending to meet that goal. This budgeting might even reveal more money they can put toward diminishing the principal balance.

Variable Rates: Starting variable rates range from 3.65% to 11.25% APR (with autopay), and will never exceed 13.95% (sometimes lower in certain states as required by law). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin of between 1.58% and 9.98%. The current one-month LIBOR rate is 2.27%. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Zero fees, period.


If it turns out that you do need to borrow to pay for college, rest assured you are not alone. According to the Sallie Mae “How America Saves for College 2019” study, more than half of families borrow to cover college costs. In the 2018-19 academic year, parent income and savings only paid $7,801 (on average) for college costs which in total averaged $26,226.
“If you refinance a federal loan into a private loan, you walk away from important federal benefits and consumer protections, such as income-driven repayment, loan forgiveness programs, default resolution options, flexibility during times of hardship and discharges based on disability or death of the borrower,” said student loan lawyer Adam S. Minsky.
Applying for federal student loans is easy amd takes about an hour to complete. In filing the FAFSA you have already applied for federal student loans. The FAFSA is your application for Direct Subsidized and Unsubsidized Student Loans and for the federal Perkins loan.  Before you begin, make sure to have this information handy to make the process go faster:
There are several ways to have your student loans forgiven, such as the Public Service Loan Forgiveness Program, which applies to qualifying loans after 10 years of payments. You can work for a government agency, non-profit organization or other qualifying organizations. Your state may also offer some repayment assistance in which they repay part of your loan, but you need to work in an area in which the state needs assistance.
Each lender will have its own requirements for taking out a loan. With most loans, credit score and income are taken into account. Higher scores and incomes tend to get the best rates or higher borrowing amounts. However, since undergraduate borrowers are less likely to have established credit or an income, lenders will usually require students to apply with a co-signer. Some lenders who have loans for borrowers without a co-signer will consider career and income potential.
Elaine Rubin is the Senior Contributor and Communications Specialist at Edvisors. Ms. Rubin is responsible for maintaining content, responding to press and media inquiries, as well as serving as the lead contributor for the Edvisors blog and the Ask the Edvisor column. Ms. Rubin volunteers in the local Las Vegas community to help students and families understand the importance of education for success. Ms. Rubin has worked in higher education finance for more than 10 years, including seven years with the U.S. Department of Education's office of Federal Student Aid, and provides information and advice from both personal and professional experiences. She holds a Bachelor of Arts degree in Political Science with a concentration in Public Policy and Administration from Northeastern University.
You can compare private student loan options on our site. Keep in mind there are a number of popular private student loan names you may see and hear, and it is bound to be confusing. Sometimes the names will be generic, and other times the name will refer to a specific lender’s program or brand name. The name of the student loan program is not as critical as an understanding of how the particular loan terms work, or how they may impact you. To give you a quick primer on some of the most popular private student loan names you may encounter, see the list below.
After completing your FAFSA, you’ll receive a financial aid award letter from the colleges you listed on the form. The timing on these letters can vary from college to college. However, if you’ve already received admissions acceptance from a college but no financial aid award letter, you can call their financial aid office to inquire about the letter’s status.
CommonBond has no application or pre-payment fees, interest rates are competitive, and co-signed loans have no origination fee. (Its medical school, dental school, and MBA loans have a 2% origination fee.) Loans are available for undergrads, grad students, and parents. Interest rates for those loans range from 3.69 to 9.74% APR with 5 to 15 year payback periods. 
You can compare private student loan options on our site. Keep in mind there are a number of popular private student loan names you may see and hear, and it is bound to be confusing. Sometimes the names will be generic, and other times the name will refer to a specific lender’s program or brand name. The name of the student loan program is not as critical as an understanding of how the particular loan terms work, or how they may impact you. To give you a quick primer on some of the most popular private student loan names you may encounter, see the list below.
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If you or your recent grad has this type of loan—which makes up 15 percent of total U.S. education debt—this may seem like an odd move. After all, the interest rates on variable private loans (given by banks and credit unions) are currently lower than the fixed rates on federally backed and private loans. But historically this situation is unusual, and if the economy improves, interest hikes are probable in the near future. “Rates could climb 5 to 6 percent over the next four years, making your monthly burden unmanageable,” says Kantrowitz. That’s why it’s wise to unload these balances as soon as possible. If you can, pay twice the required amount until you have eliminated this debt and make only the minimum monthly contribution toward your fixed-rate federal loans, since those rates cannot increase.
Student loan repayment assistance is a perk that more companies are providing given that most students carry debt into their careers. Although only 4% of companies offer this benefit now, it is the hottest benefit of the past year with 76% of people saying that student loan repayment benefits would be a deciding or contributing factor to accepting a job, according to the 2015 American Student Assistance survey. Employers usually pay $100 to $300 a month with many employers matching contributions up to $2,000 per year.

Keep in mind that you should work with a lender that doesn’t charge loan origination fees, which might cancel out interest savings. It’s also a good idea to weigh the risks of refinancing federal student loans, because doing so would change them to private loans and permanently forfeit federal protections such as income-driven repayment and forgiveness options.

Also be aware that many private student lenders require a cosigner, usually a parent or other relative who would take over responsibility for the loan if you stop payments for any reason. That also means your payment activity impacts their credit score, so if you do sign up for a loan with a cosigner it is important to both of you that you pay on time.
Key information to understand student loans includes being aware of the annual and cumulative loan limits, interest rates, fees, and loan term for the most popular private student loan programs. Often the interest rates, fees and loan limits depend on the credit history of the borrower and co-signer, if any, and on loan options chosen by the borrower such as in-school deferment and repayment schedule. Loan term often depends on the total amount of debt.
Definition: A private student loan (also known as a private education loan) is a non-federal loan used for education related expenses. Private student loans may be an option once you have already exhausted other forms of free and federal financial aid. These loans are typically based on a strong credit history and verifiable proof of income or employment history.

The primary cardholder is responsible for the debt. There is no cosigner release option. Cosigners may be released after a series of qualifying, on-time monthly payments. This varies by lender. Cosigners may also be released via student loan refinancing. And this includes the option to transfer debt from the parent to the student (through select partners). Eligibility is based on credit an income verification.
You might be eligible for tax credits if you’re currently paying tuition, including while you’re in grad school. While there aren’t any tax credits related to simply paying student loans, it’s worth checking out if you’re currently in college or thinking about going back to school soon. See our post on student loan tax credits for more information.
Pay early. Pay often. Pay extra. If you want to ensure that your loan is paid off faster, tell your servicer two things. First, tell them that the extra you pay is not intended to be put toward future payments. Second, tell them to apply the additional payments to your loan with the highest interest rate. By doing this, you can reduce the amount of interest you pay and reduce the total cost of your loan over time.
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