There’s no reason to default on your student loan payments so long as you’re informed about your options. If you’re struggling to make payments and feel you may be at risk of defaulting, it’s crucial to get organized and find a way to keep up with your payments. Here’s how:
1. Switch Repayment Plans
If you can’t make your payments then you need to get on a more forgiving repayment plan so that you can. The best option is Income-Based Repayment, which can leave you with very low payments derived from your income. And with the newly minted Pay As You Earn Program, IBR just got even better.
2. Know Your Loans
Some borrowers don’t even realize they’ve defaulted until it’s too late. Don’t let this be you! Do your own research into what loans you have and what your monthly payments need to be in order stay out of default.
3. Start Using Auto Pay
Lack of paying attention is a dumb reason to bring on the mess you’ll be in if you default. If you have trouble with organization and a lousy memory for all things practical: now’s the time to sign up for auto pay with your bank.
4. Start Using A Budget Worksheet
Nobody can keep track of a budget in their head, especially when you’re budget is plagued by a debt repayment schedule. Start writing everything down so you don’t forget or miss anything.
5. Get Creative
The student loan crisis has brought with it a number of unusual programs across the nation. If you’re desperate (or even just adventurous), try something extreme like relocating to Kansas to get help with your student loans.
6. Consolidate Your Debt
Consolidating all of your loans into a single monthly payment will make it clearer how much you owe each month. Instead of multiple payments to keep track of, you’ll have one number in your head and can make that your goal.
7. Loan Rehabilitation
By going through a loan rehabilitation program, you’ll be making a deal with the Department of Education in which you agree to a new monthly repayment amount and to making those payments on time for an agreed upon period.
Seriously, you don’t want to fall into the trap of default, it will tank your credit score and the debt will still follow you around forever because it’s next to impossible to declare bankruptcy on your student loans. It’s a lot of information to take in and a lot of work to get to know you’re loans and truly understand your options. For assistance figuring everything out, try calling on the student loan experts who can help you manage your debt.