Repaying student loans can feel like it will never end and if there is ever a time that you want to explore options for changing your repayment terms make sure to do your research first. A recent article in the NY Times, gives some great advice on how to avoid the most common pitfalls. Make sure to read the entire article as well as the comments.
1. KNOW YOUR LOANS: what's your balance and who do you owe? If you aren't sure, you can track that information down on the National Student Loan Data System.
2. INCOME DRIVEN PAYMENTS: Federal loans might allow you to change your repayment amount based on your circumstances. Check out this US Department of Education website to check your eligibility.
3. STAY ENROLLED: If you do have an income driven plan, that plan expires annually and requires approval yearly. Mark your calendar 4 months before the deadline and get it done right away so you have plenty of time to deal with any hiccups.
4. NO FOREBEARANCE: It can feel like immediate relief but the long-term interest might be overwhelming so if possible, try to avoid this. Instead, ask for other options in writing. Here's a sample letter.
5. DROP CO-SIGNERS: If you make consistent payments for your servicer's required time, you should be able to do this. Using auto-debit might earn you a rate decrease so that could be worth asking about too. If you do pay by check, do NOT include a note with your payments or expect any notes you write on your check to be read. Often these envelopes are put through an automated system and if the weight indicates there's nothing in there, then "there's nothing in there".
6. CHECK YOUR CREDIT: Not just once, but regularly. If you notice anything negative, figure out if something has gone amiss or it's due to something being incorrectly reported. In either case, make sure to get on it right away.