Student Loans

1/30/2018

What is a Loan?

Money you borrow with interest that you need to pay back.

A type of loan designed to help students pay for schooling and expenses related to schooling.

https://studentaid.ed.gov/sa/types/loans#types

Paying down the principal of your loans faster lowers the amount in interest you'll pay over time. Start paying it off slowly while still in school. Pay off the principal, not the interest.
Know which loans you should make prepayments on. Federal student loans allow you to make prepayments when you are still in school. You should pay off the unsubsidized student loans first. Loans from private lenders might penalize you.
Live at home and save money.
Refinance and get a new lower interest rate.
Make more than the minimum payment.
Do the math and calculate your payoff date.
Take a job that offers forgiveness- some jobs offer forgiveness for part or all of your student loan debt.
Take full advantage of tax deductions and credits, and take interest rate reductions.
Avoid prepayment programs.
Trim your budget and earn extra money.

Failing to notify the loan servicer about changes in contact information.
Not signing up for auto-debit.
Choosing a repayment plan that is too long.
1. Longer repayment terms lead to lower monthly payments. But, longer repayment terms also lead to more interest being paid over the life of the loan. Increasing the loan term on a 6.8% loan may cut the monthly payment by a third, but more than doubles the total interest paid over the life of the loan. Choose shorter repayment terms to save interest.
Misunderstanding loan amortization and how interest accrues.
Failing to claim the student loan interest deduction. Borrowers can deduct up to $2,500.
Not considering the consequences of interest capitalization.
Accelerating repayment of the wrong loan: pay off the loan with the highest interest.
Counting on bankruptcy discharge. Federal and private student loans are almost impossible to discharge in bankruptcy.

1. Avoid Upfront Payments
2. Be Wary of Aggressive Sales Pitches
3. Don't Give Out Your Personal Info
4. Do Your Research

Report being scammed to the CFPB, the Federal Trade Commission (FTC) and your state attorney general's office.