This article originally appeared in our monthly newsletter, Fiscal Therapy.
Please subscribe if you'd like to receive similar articles on a monthly basis.
This month I’m focusing on student loans, a major planning consideration for many of my clients. I highlight below several insightful articles I’ve read recently on student loans. Enjoy!
WHAT I’M THINKING ABOUT: Student Loans!
Is paying off student loans a top priority for you this year? Check out these encouraging stories of how others have made bold choices with their finances to help them pay off student loans faster.
Here are my quick tips for tackling student loans:
- Keep the long view in mind. Spending cuts and sacrifices today are temporary and well worth the pursuit of becoming debt free.
- Automate and never miss a minimum payment!
- Put any extra cash toward your highest interest loans.
- Once you pay off your first loan balance, put that monthly payment toward the remaining loan balance with the highest interest rate.
Not sure how to balance emergency savings and loan repayment? Read this article.
Not sure how to balance long-term savings with loan repayment? Read this article.
STUDENT LOAN PSA: Know what you owe and know your rights
This discouraging New York Times article highlights an all too familiar story around student loans. The companies that service your student loans are in the business of making money and sometimes do not adhere to the laws that are supposed to protect you, the borrower. This is a reminder that you need to: 1) understand your rights, 2) know your debts, 3) know your options, and 4) know your credit report. These four components will help you advocate for yourself and know when your loan servicer is mismanaging your loans or reporting false information to credit agencies. This recent New York Times article by Ron Lieber goes into more specifics about how to proactively take charge of your loans.
Here are a few resources:
- National Student Loan Data System will give you a detailed listing of your federal student loans.
- Annual Credit Report will give you a free credit report each year from each of the three major credit bureaus. Check your score for free (really!) at Credit.com.
- Here’s an overview of repayment options for federal loans and a repayment estimator tool.
- Here’s a refresher on debt collectors for those of you with loans that have been sold to a collection agency.
On the heels of our goal setting at year-end, here are some helpful tips to keep you on track. I particularly appreciated the first tip: to be frank about finances in your social circles.
I also liked the call to be thrifty by buying and selling used clothes and household items. The article mentions Poshmark, and I’ll also toss out ThreadUp, AptDeco, and local consignment stores. My family is moving apartments next week so this is top of mind for us right now.