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Student loan repayments are resuming. Are you ready?


The moratorium on student loan repayments ends in October. Interest rates on those debts return to normal on Sept. 1 Now is the time to think about how you will make monthly payments and whether there are less expensive alternatives to your current loan plan. Tropical Financial can help you downsize your debt with this guide.

Whether you are a student borrowing more this fall semester or a graduate with school debt, you can reduce your obligations and shorten the time to pay off your loans. The first step is to get your finances in order. You can contact one of our budget coaches for guidance.

As a student, borrow only what you need. The less you withdraw today, the less you will owe after commencement. Fund your classes, books and fees through scholarships, grants and other sources. Consider part-time work, scholarships, grants, or other financial aid options.


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Find the right loan for you. There are four categories: direct subsidized, direct unsubsidized, Direct PLUS (with parents), and private. Are you a full-time student or going to school part-time? Should a parent take out the loan or co-sign with you? What are the plusses and minuses of a private loan? NerdWallet can walk you through the choices. The Consumer Financial Protection Bureau has a detailed guide, too.

Here's something you may not have considered: Paying the interest while still in school. They will reduce the loan balance at graduation and compound interest on interest on unsubsidized federal or private loans. Sallie Mae says that you will not only save money but also build a credit history. Credit bureau Experian will show you payment strategies such as electronic debits that could qualify you for a discount from the lender.

You may have heard about the federal government’s loan forgiveness program. At the moment, only former students at specific for-profit colleges are eligible. Depending on your loan program, you may qualify for loan balance reductions after a number of years of qualifying service. How? By performing public service as an employee of the U.S. government, certain non-profits, and by volunteering for AmeriCorps or the Peace Corps and making 120 qualifying loan payments. You can find a list of qualifying employers and more information on this Federal Student Aid web page.

If you achieve a good credit score after graduation, you can save money by refinancing your student loan. It’s not as simple as shopping around for a lower rate. Switching from one lender to another may cost you federal loan protections. Money Magazine will show you how to refinance in nine steps, starting with deciding whether a new loan is right for you. Bankrate will tell you which documents you need when applying.

Last, make extra payments. Maybe. Putting more money toward the balance will get you out of debt earlier by reducing the amount of interest. However, if you have a high-rate credit card balance, the money is better to eliminate that debt. Bankrate has a guide on when you should and should not pay down your balance ahead of schedule.

Borrowing for a college degree can be a highly worthwhile investment in yourself. It’s also an opportunity to learn how to manage your debts. Tropical Financial has several guides to help you through the process, including a personal loan handbook and its free Get Beyond Money online community. And, if you have a current loan balance, see how you can pay it down quicker using the Tropical Financial Student Roundup powered by ChangEd.


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