[faq] straight answers to our top 5 most asked student loan questions

Top 5

Personal Finance

Questions

STUDENT LOANS

#5

MOST FREQUENTLY ASKED PERSONAL FINANCE QUESTIONS

Should I Pay Off My Student Loan First Or Contribute to a 401k?

Question:

Student Loan Payoff vs. 401k

Answer: Consider doing both!

• Start small and take advantage of 401K contribution employer matching

(start with 2%-3%, grow your contribution as you reasonably can afford to)

• Extra income you can put towards your student loan

• As far as debt is concerned, student loans are among the lowest cost financing available.

Run the numbers, pay off any high cost / high interest credit first.

Student Loan Payoff vs. 401k

#4

MOST FREQUENTLY ASKED PERSONAL FINANCE QUESTIONS

I’m Struggling To Make My Student Loan Payments.

What Should I Do?

WHAT TO DO IF YOU ARE STRUGGLING TO MAKE PAYMENTS

Question:

• If you can, try to make extra income to keep paying down your student loan debt and meet your payments.

We’ve detailed a number of side hustle ideas to make a few extra bucks in a pinch on our blog.

• If you continue to struggle, let your lender know about your struggle and ask about payment plans or hardship deferments.

Answer: Before Giving Up – Fight!

WHAT TO DO IF YOU ARE STRUGGLING TO MAKE PAYMENTS

• You may wish to try and consolidate your student loans out of a government subsidized program

(less risk to any assets in case you forced to default)

• Check, you might be able to receive a deferment or forbearance

(allows you temporarily to postpone or reduce your student loan payments)

WHAT TO DO IF YOU ARE STRUGGLING TO MAKE PAYMENTS

#3

MOST FREQUENTLY ASKED PERSONAL FINANCE QUESTIONS

OUT OF OPTIONS: WHAT NOW

I’ve Exceeded My Forbearance Period And Still Can’t Afford My Student Loan Payments.

Is There Anything Else I Can Do?

Question:

• If you have gone into default already, contact the Education Department’s Default Resolution Group

• If you have NOT gone into default yet, you can contact a loan servicer at StudentAid.Ed.Gov

Answer: Exhaust All Options

Resource: StudentAid.Ed.Gov

OUT OF OPTIONS: WHAT NOW

#2

MOST FREQUENTLY ASKED PERSONAL FINANCE QUESTIONS

What Is The Best Income-Driven Repayment Plan For Me?

BEST INCOME REPAYMENT PLANS

Question:

Option #1:

1. REPAYE PLAN(Revised Pay As You Earn)

• Payment is 10% of your discretionary income

• Forgiveness is after 20 (or 25) years of qualifying repayment

Answer: 4 Options for Repayment

BEST INCOME REPAYMENT PLANS

Option #2

2. PAYE PLAN (Pay As You Earn)

• Payment is never more than 10% of discretionary income

• Forgiveness is after 20 years of qualifying repayment

BEST INCOME REPAYMENT PLANS

Option #3

3. IBR PLAN (Income-Based Repayment)

• Payment is never more than 15% of discretionary income

• Forgiveness is after no more than 25 years of qualifying repayment

BEST INCOME REPAYMENT PLANS

Option #4

4. ICR PLAN (Income-Contingent Repayment)

• Payment is never more than 20% of discretionary income

• Forgiveness is after 25 years of qualifying repayment

BEST INCOME REPAYMENT PLANS

#1

MOST FREQUENTLY ASKED PERSONAL FINANCE QUESTIONS

I’m Looking For Ways To Pay For School BUT I Have Bad Credit.

What Options Do I Have?

OPTIONS FOR BAD CREDIT

Question:

• A number of powerful Government programs exist to help fund your education: (Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans - FAFSA)

• Check federal financing first before looking into private student lending programs.

They will generally have a lower interest rate and more flexible repayment periods.

Resource: https://www.reallybadcreditoffers.com/student-loans.php

Answer: First Federal Then Alternatives

MOST FREQUENTLY ASKED PERSONAL FINANCE QUESTIONS

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Source: https://www.salliemae.com/plan-for-college/types-of-student-loans/federal-student-loans/

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