If you are a security clearance professional with student loan debt, you may be feeling a sense of dread with awaiting the Supreme Court’s decision whether to block the White House’s student loan forgiveness plan. As a clearance holder, if you have student debt, it’s a good idea to start preparing for what to do if this plan is blocked. Delinquent debt can impact security clearance status, so it’s important to not ignore student loans.
7 Strategies to Manage Student Loan Debt
Fortunately, there are several alternative strategies you can use to manage your student loan debt and take control of your finances. And we promise none of these financial recommendations include skipping breakfast.
1. The Avalanche Method
One of the most effective ways to tackle student loan debt is by using the avalanche method. This method involves focusing on paying off the loan with the highest interest rate first, while still making the minimum payments on your other loans. Once you have paid off the loan with the highest interest rate, move on to the loan with the next highest interest rate and so on until all of your loans are paid off.
This method can be very effective in reducing the amount of interest you pay over time and can help you get out of debt faster. However, it does require discipline and dedication to stick to the plan, especially if you have a large amount of debt.
2. The Snowball Method
The snowball method is another popular way to tackle student loan debt. This method involves starting with paying off the loan with the smallest balance, while still making minimum payments on your other loans. Then, move on to the next smallest loan until all of your loans are paid off.
This method can be effective for individuals who need a boost of motivation to tackle their debt. Paying off the smallest loan first can give you a sense of accomplishment and can help keep you motivated to continue paying off your debt.
3. Hustle and Earn More
Another way to tackle your student loan debt is to find ways to earn more money. Consider freelancing, taking on a side job, or selling items you no longer need to increase your income. Every extra dollar you earn can be put towards paying down your student loan debt and getting you closer to financial freedom.
4. Get Strategic
If you are struggling to make your monthly payments on your student loans, consider switching to an income-driven repayment plan. These plans adjust your monthly payment based on your current income level, which can make it easier to manage your student loan debt.
Keep in mind that while these plans can be helpful, they may result in you paying more in interest over the life of your loan. Be sure to do your research and calculate the total cost of the loan before committing to an income-driven repayment plan.
5. Consider Public Service Loan Forgiveness (PSLF)
If you’re a government employee, you may be eligible for the Public Service Loan Forgiveness program, which forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments while working for a qualifying employer. Be sure to do your research and ensure that you meet all the program requirements, as it can be a significant source of debt relief for those who qualify.
6. Refinance Your Loans
Refinancing your loans can be a great way to lower your interest rate, which means more of your payment goes towards paying down the principal. However, not everyone will be eligible for refinancing, and it’s important to do your research before committing to a refinance.
Make sure to shop around and compare rates from different lenders, and read the fine print to ensure that you understand all of the terms and conditions of the refinance.
7. Use Technology to Your Advantage
There are many online resources available to help you manage your student loan debt and track your progress towards financial freedom. Loan calculators, budgeting apps, and other tools can be incredibly helpful in keeping you organized and on track.
Don’t Forget Employer Tuition Assistance Programs
Many employers offer tuition assistance programs, which can help reduce the amount of student loan debt you accumulate. If your employer offers such a program, be sure to take advantage of it and use the funds to pay down your student loan debt faster. Remember, navigating student loan forgiveness can be overwhelming, but by taking control of your finances and implementing these tips, you can create a repayment plan that works for you and your unique situation.
