As bankruptcy attorneys well-versed in debt relief and similar issues, we at Utah Bankruptcy know full well how difficult student loans can be for people just leaving or still involved with university. It’s very difficult for often-young people to immediately begin making what are commonly large student loan payments, especially before they’ve had a real chance to get into the workforce and recoup some of their debt.
There are ways to discharge a student loan using bankruptcy strategies, but they’re often difficult and not options for all people. For those who do have this option, we’re here to help. For others, here are some general tips on paying down student loans in smart ways so as to avoid major financial crisis.
Beat the Minimum
Even if it requires a little trimming of the fat from another financial area, do your very best to pay more than the minimum amount. You can set up automatic payments with the extra amount baked in, which also makes this into more of a habit and puts an extra step between you and simply paying the smallest amount possible.
Consolidate or Refinance
If you have multiple loans, consolidating them into one monthly payment can be a great way to stay organized. Even more importantly, many refinancing options will help you decrease your interest rates, meaning the same payments you were already making will go much further.
There are certain jobs, such as teaching or other public service work, which might offer you forgiveness for some portion of your debt. If you’re in a field where this is even a partial option, make sure you aggressively look into this for your student loan debt.
There are a few situations where your lender might offer a small reduction in interest rate – making automatic payments are often one. Even a tiny reduction in interest rate can go a long way, so any time these opportunities present themselves in a way that really doesn’t change much on your end, be sure to jump on them.
Tax Credits and Deductions
Student loan debt doesn’t have a ton of silver linings, but one major one is tax deductions you’re almost certainly eligible for on federal taxes. These can be up to $2,500 in most cases, and if you’re still in your 20s while you’re making payments, there’s almost no way you won’t be eligible.
In addition, especially for people still in school (often graduate school) while also paying off student loans, tax credits will often be an option. Eligibility here will vary from case to case.
Have any questions about this or any other element of our bankruptcy services? Speak with one of our experts at Utah Bankruptcy today.