Dealing with student debt

If you have student loans, you’re not alone. Here are ways to take control of your debt.

Tips to help you pay off student debt

We know in many locations that the costs of education could leave you graduating with significant debt. This doesn’t have to feel debilitating.

Student debt can be complex, especially if you’ve taken out multiple loans. But you can take control of your situation by understanding your complete loan picture, such as what loans you have, where you have them, and how much you owe. Consider these tips and strategies as you pay off your loans and move on with your financial life. 

Make a checklist of all the debts you have incurred, along with the payments and interest rates. You may want to pay off higher priority ones ahead of those designated as student debt (for example, those with higher interest rates).

Take advantage of grace periods

Some government student loans may allow a brief grace period after graduation when no payments are due. After that, however, you’ll likely need to begin payments unless you qualify for a deferment because of unemployment or health problems. 

Renegotiate a more realistic payment plan

If you have trouble making your minimum payments, call your creditors and explain your situation. They might be able to work out a payment plan you can live with. Try not to miss payments or fall behind, otherwise your credit score (or creditworthiness) could suffer (if relevant in your country). That could make borrowing more difficult and expensive in the future. 

Look to employer benefits

If your employer offers a retirement plan, especially if it has a company contribution, and/or a match on your contributions, make sure you’re signed up. Consider contributing enough to get any available company match, then pay down high-interest debt with the rest of your savings.  

Avoid late payments

No matter what country you’re in, the most important element credit agencies consider when figuring your credit score (or creditworthiness) is your payment record. So whatever you do, don’t ignore the payment-due letters you receive for student loans or other debt. Building good credit can help you qualify for low-interest loans, secure a rental property, qualify for a mortgage, and create the life you want to live. 

Consider refinancing

This involves taking out a private loan to pay off all or a portion of your student loans, typically at a lower interest rate (if you qualify), which could result in significant savings. It may also let you extend the term from, say, 10 to 20 years. Keep in mind, though, you could end up paying more over a longer term. 

Learn more

Planning for your child’s university/trade school

Five steps to manage finances and debt

Managing your debt activity sheet

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