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Guide to paying off student loans

Learn ways to make repaying student loans more manageable.

If you’re carrying student loan debt, you’re not alone: Nearly three-quarters of graduates of four-year colleges have student loans, with an average loan balance of $37,000. While this figure can be daunting, having a well-thought-out game plan can make paying off student loans more manageable.

Explore your options

The standard repayment schedule for student loans is 10 years. But that may not necessarily work for you if your starting salary is low or you’re having a hard time finding a job.

Federal student loans have a number of important features and protections that help make payments more manageable, such as income-based options that allow you to make payments that are a percentage of your income. You can also apply for deferment or forbearance, which lets eligible borrowers temporarily suspend payments. During forbearance, you will still be responsible for the interest that accrues. If you qualify for deferment, you may not need to pay interest.

Analyze your budget

Between rent, utilities, groceries and the occasional night out with friends, it can be hard to see where student loans fit into the picture. A budget can help you get a handle on it. To simplify the task, try the 50/20/30 method: No more than 50% of your income should go toward fixed expenses like rent, food and utilities; dedicate 20% of your income for savings and debt repayment; and spend 30% or less on discretionary expenses.

Don’t go it alone

Check to see if your employer has any programs to help with payment plans. While only 4% of employers currently offer student loan repayment assistance as a benefits perk, more plan to.

To refi or not?

You might be able to save on interest by refinancing your student loans. But before you do, make certain that you will not need to take advantage of the features and protections offered by federal loans such as deferment, forbearance and public service loan forgiveness.

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