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So You Have a Huge Student Loan (Like Me), Here Are Your Options

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[Editor's Note: I'm still shoveling out of two feet of snow, so today we have a guest post from Grant Biles, the co-founder of Gradible. The company helps people on how to eliminate student loan debt. The following is his guide on what students can do to pay off their loans. I'm often offered guest posts that are very self-serving, so it is refreshing that some of the suggestions don't require the use of his company's services. Hopefully tomorrow, we'll get back to our regularly articles.]

Options

I’m one of the more than 40 million Americans who holds student loan debt, and if you’re reading this, I imagine you or someone you love does, too. Two out of 3 undergraduates leaves school with student debt these days, and the average graduate has more than $30,000 in student loan debt.

In my role as a co-founder of Gradible, a platform that helps people with student loan debt pay it back faster, I have talked to thousands of graduates across the country about their different situations and needs regarding student debt. The two biggest takeaways from these conversations are that student loan debt situations are varied and most people want to manage the repayment of their debt in a balanced way: they want to continue to have a fulfilling life, while also eliminating the debt as quickly as possible.

My team and I have done extensive research and found many of the most effective and helpful options for the variety of different situations that student loans present their holders. If you’re staring down a huge monthly student loan payment and wondering how you’re going to afford all your necessities, or just want to eliminate the small amount of debt you took on as quickly as possible, we’ve found answers and options for you.

Options for Managing and Repaying Your Student Loans

  • Modifying Repayment Terms

    The direct impact of student loans is not the total balance, it’s the monthly obligation that must be balanced with all of life’s other necessities and nice-to-haves. We have found that, especially for recent graduates still working their way up the salary ladder, Income Based Repayment is a very helpful tool. This pegs your monthly payment at 10% of your take-home pay. You can file for it at the link above. The downside of this program is that by reducing the monthly payment, you naturally are extending the repayment lifetime and therefore the total amount of interest you will pay. If you are unemployed, have had trouble finding a job, or been very ill, you can also work with your student loan servicer to enter forbearance or deferment. These programs stop the repayment of your loan for a fixed amount of time, if you qualify. Again, the catch here is that your repayment lifecycle increases, because interest continues to accrue in almost all situations.

  • Student Loan Repayment Services

    My company, Gradible, offers a variety of flexible ways to earn your way out of debt faster and manage your monthly payments. We source offers from businesses such as cashback deals on shopping, surveys and studies, short freelance projects, and more, that you earn credits for completing. We then redeem these for you directly to your student debt. We’ve helped graduates pay off more than $200,000 in student loans in the past year, and we’d love to help you, too. Another service that offers cash back to your student loans is SmarterBucks. Check out these two websites to begin accelerating your rate of repayment.

  • Part-time work

    When you think of part-time jobs, your mind likely goes to the old standards: manual labor, restaurant and bar work, or retail. All of these options can provide you with extra cash to meet liabilities like student loans. Additionally though, in our modern, smartphone-driven age, there are a variety of more flexible opportunities that could be more appealing to earn the extra cash you seek. Here are just a handful of the most popular:
    You can drive an Uber or a Lyft.
    You can deliver packages as a Postmate.
    You can do odd jobs as a TaskRabbit.
    You can pick up and deliver groceries for Instacart.

  • Refinance your loans or get them forgiven

    If you qualify (and full disclosure this is last because so few people do) for the following programs, they can significantly reduce your monthly payment and total amount you repay.CommonBond and SoFi offer refinancing for graduate degrees, but have stringent criteria for income, occupation, and degree type. LendKey also offers consolidation and refinancing products. If you qualify, these are a great way to reduce your interest rates and monthly payments, but the reality is that very few people will qualify for this, due to income and debt levels. Credible is a great site if you want to compare all of your refinancing options in one place.

    If you are currently working in a public service capacity, the Public Student Loan Forgiveness Program is something you definitely should consider. This program helps teachers, firefighters, police, public defenders, and other civil servants reduce monthly payments in a similar manner to Income Based Repayment (10% of monthly take-home pay), and it qualifies you to have your loans completely forgiven after 120 consecutive on-time monthly payments.

This list is not exhaustive, but it does present you with most of the options we’ve found. I’m obviously biased, but I think Gradible makes the most sense for the most borrowers, so give us a shot, and I hope this guide is helpful. Good luck getting to zero.

Last updated on January 27, 2016.

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