7-step strategy for paying off student debt – cbs news

“Part of the challenge for borrowers is that every situation is so unique,” said Matthew Ribe, director of legislative affairs at the National Foundation for Credit Counseling. Electricity history timeline “One of our counselors ran all the possible repayment options and found there were 18,000 possible permutations, given the different types of loans, interest rates, changes based on graduation dates and so on.”

Indeed, student loan repayment rules can be dizzyingly complex. Npower gas price reduction The Department of Education lists five different repayment options on its website: standard, extended, graduated, income-sensitive and income-based. Bp gas prices nj However, dive in more deeply and you’ll find that the only repayment plan that’s simple is the “standard” plan, which involves repaying loans in equal installments over a 10-year period. Grade 6 electricity unit test However, it’s also likely to be the least affordable plan for new graduates who are deeply in debt.

“Extended” repayment, which can spread payments out over periods as long as 25 years, is open only to those with more than $30,000 in debt, and certain types of student loans don’t count in the total. Kd 7 electricity socks Graduated and income-sensitive repayment plans are all based on the borrower’s income, but they use different formulas to determine your payments. Electricity freedom system And income-based repayment — the best option for many heavily indebted borrowers — has four different plans, all calculated with different formulas and all governed by slightly different rules.

Step 1 is to figure out just how much you owe and to whom. Gas unlimited houston texas The good news is that this step is easy because the Department of Education operates the National Student Loan Data System, which tracks all federally guaranteed student debt. K gas constant Sign in to get a full listing of loan details — amounts, interest rates and the type of debt, i.e. Gas monkey live Perkins loans, subsidized or unsubsidized Stafford loans, PLUS loans and so on.

If you took out loans that aren’t federally guaranteed — a.k.a. 93 gas near me “private loans” — they won’t be listed in this database. Electricity vs gasoline To get information about them, order a free copy of your credit report at www.annualcreditreport.com, which will pick up these other debts, suggested Ribe, whose group just launched a student loan counseling program.

The student loan numbers are staggering: 40 million borrowers with more than $1.2 trillion in outstanding debt. 3 main gas laws That’s an average student loan ba…

Student loans are not created equally. Electricity how it works Some, such as Perkins loans and subsidized Stafford loans, are decidedly better than others. K electric company Why? If you go back to school or lose your job, you can put these loans on hold, deferring repayment until you regain employment, and the government will pay the interest while you wait. Bad gas 6 weeks pregnant The loan balance will not rise. C gastronomie traiteur avis You can defer most other student loans, too. Electricity water analogy animation But if you do, interest will accrue and boost your outstanding balance.

Moreover, Perkins loans qualify for a wide array of borrower forgiveness programs. Gas cap light If you join the military or Peace Corps, become a firefighter, law enforcement officer, nurse or work with special education kids or the disabled, you may be able to have a portion of your Perkins loan balance wiped away for each year you work in a qualifying profession.

Unsubsidized loans and so-called PLUS loans have many of the same characteristics: They’re flexible debts with a myriad of borrower protections, so they would vary mainly by interest rate.

All things being equal, you would want to first pay off your highest-cost debts and those with the least flexible terms. Gas key staking tool That would mean private loans and PLUS loans, which are often issued at rates as high as 8.5 percent, would have first priority.

But, you say, you need to pay on all your loans. 76 gas station jobs True. Electricity song omd However, if you plan your repayments wisely, you can stretch out repayment of the lower-cost and more flexible loans, while accelerating payment of the high-cost debts.

If you have Perkins loans or subsidized Stafford loans, keep those separate. Gas leak los angeles If you consolidate these loans with other, unsubsidized loans, you lose the right to have the government pay interest on them if you had to defer payment for some reason.

Consider taking the rest of your federal student loans and consolidating them into one debt in the government’s Direct Loan program. Gas prices in texas 2015 By consolidating this way, you don’t lose the borrower protections, such as the ability to put payments on hold if you go back to school, become ill or lose your job. Gas natural fenosa You also don’t lose the benefit of the low rates on many of these government debts.

Direct loan consolidation simply gives you one payment that’s based on the weighted average interest rate on all the consolidated loans, rounded up to the nearest one-eighth of 1 percent.

Now go to the government’s repayment estimator tool to figure out your payments on each loan. M gasol If paying under the standard formula would leave you with no discretionary cash, stretch out the payment on the consolidated loans either by signing up for the “extended” repayment or the most flexible of the income-based repayment programs — the Revised Pay As You Earn program (REPAYE). Gas hydrates are used This will reduce the payment on what’s likely to be your biggest debt, allowing you to spend more of your income paying down the higher-cost loans.

Next, look at your highest-cost loans and pick the one with the smallest balance. Gas prices going up to 5 dollars Make a point of using any available discretionary income to pay that loan off completely as quickly as you can. Electricity lesson plans year 6 When that loan — and its payment — is gone, take the amount you would have paid on that debt and apply it (and any other discretionary cash) to the balance of the second-most-costly loan, until all of your high-rate debts are gone.

When you make these extra payments to reduce the principal balance of these loans, be sure you make that clear to the loan servicer. Electricity edison The Consumer Financial Protection Bureau has found that some servicers hold the additional principal payments aside and act as if they’re simply to be used for the next payment.

You want these payments to reduce the principal balance, so use the CFPB’s form letter that gives the servicer specific instructions on how the payment is to be applied. Thitima electricity sound effect Be sure to check that it’s been applied correctly. Electricity jokes riddles If it hasn’t, report the problem to the CFPB.

You can then do the same with your less-costly student debts or simply use more of your discretionary cash to invest in, say, your company’s 401(k) plan. Gas vs electric stove cost Either way, getting rid of your highest-cost debts and those that don’t allow for deferment or forbearance should make the rest of your student debts more manageable.

Finally, if you’re befuddled or already in trouble with your student loans, contact the National Foundation for Credit Counseling and sign up for its student loan counseling program. Eon gas card top up If you have problems with your loan servicer, contact the CFPB, which is scrutinizing the industry’s practices and promises to crack down on lenders that misapply payments or make it impossible for graduates to get into budget-friendly repayment plans for which they’re qualified.