4 tips to manage your student loan debt

By Jackie Lam

Reviewed by Kimberly Rotter

Aug 21, 2023

Read time: 3 min

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I love having more bills to pay—said no one, ever. 

When federal student debt payments were paused back in March 2020, you probably managed to get a bit of breathing room in your money situation. And it's been great. But now that student loan payments are resuming, the added expense could throw your budget out of whack.

To keep you on top of your finances and your student loan debt, let's look at how to manage your budget to factor in this just-around-the-corner expense—and put together your game plan before your first repayment date. 

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1. Get familiar with your student loan details 

Before you dive into the budgeting part, look under the hood of your student loan situation. (If it's been awhile, time to take a gander.) You can find information about your federal student loans at studentaid.gov.

Look at the following: 

Your student loan servicer. A few student loan servicers such as Navient, PHEAA, and Granite State have shuttered. If your student loan servicer has closed operations, identify your new loan servicer. Note that this doesn't change anything about the actual student loan itself. 

Loan details. This includes the remaining balance, monthly payment, your interest rate, repayment term, and any fees and other terms.

Repayment plan. Review whether your current repayment plan is still a good fit. Income-based repayment plans can give you a payment as low as zero. If you’re struggling, consider looking at your repayment options. 

Student loan forgiveness. Debt forgiveness is possible under the right circumstances. Some borrowers can qualify for student loan forgiveness. You would need to satisfy all of the requirements, such as staying in a certain type of job and making a certain number of on-time payments. Follow this link to find out if you might qualify, and if so, what you need to do. Future forgiveness won’t help you afford the payments right now, but could give you a nice goal to shoot for.

If you have private student loans, you can get all of this information from your lender.

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2. Update your budget with the student loan payment

You need to get your brain around how much money you have coming in and what your minimum financial obligations are. If you don’t already have one, make a budget now. If you’re not sure how, try the Achieve MoLO app. It’ll help you track income and expenses so that you can have more money left over at the end of the month. Then, you could put that “found” money toward your debt payments.

It's super important to stay on top of your student loan. Because if you don’t, you could jeopardize your eligibility for forbearance, deferment, or forgiveness programs. You’ll also face greater fees and even more interest charges, not to mention a negative impact on your credit. 

Other repercussions? You might not be eligible for other forms of student aid. And if you default on your student loans, your tax refunds could be withheld. Also, the lender could get a court order to withhold part of your paychecks (this is called wage garnishment). 

Enough said. Your student loan is a monthly non-negotiable bill, just like your rent or mortgage.

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3. Find new ways to generate cash for your student loan payment

It's one thing to add another line item to your monthly budget—and another to afford it. You might need to drum up new ways to boost your monthly cash flow.

First, review your monthly expenses for areas where you can trim spending. Dining out is often an easy target. So are monthly subscriptions. Next, brainstorm ways you can earn more money. Ask for more overtime or a raise. Look for a new job (new jobs tend to deliver bigger salary bumps than raises from the same company). Experiment with juggling a side gig to find out if it’s feasible or worthwhile. If you can, grab a second job for a few hours a week. 

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4. Strategies if you’re struggling to make your student loan payment

Another way to make your debt load more manageable is debt consolidation. Debt consolidation is taking one new loan and using it to pay off multiple smaller debts. Two reasons to consolidate loans are to get a lower interest rate on the debt, or to get a more manageable monthly payment. There are a couple of ways to consolidate debts so that you can keep up with your student loans.

First, student loans can only be consolidated into other student loans. The Department of Education offers consolidation loans for federal student loans. Private student loan lenders may offer consolidation for private student loans. Expect other lenders, including Achieve, to let you know that you can’t use another kind of loan to refinance a student loan. That’s because student loans are covered by different rules and laws.

What you could do is consolidate your other debts to potentially free up cash for that student loan payment that’s about to restart. Debt consolidation can simplify your finances by reducing multiple monthly payments down to one. And if you can get a lower interest rate, your total monthly payment might go down.

There’s also a solution for people who are struggling. If you can’t afford to repay your debts in full, debt resolution is the process of getting your creditors to agree to lower the amount you owe. You pay the lower amount and the creditor considers the account paid in full. The debt is resolved. This is not an option for your student loans, but if you genuinely can’t afford to pay back all of your debts, *resolving some of them could help you afford to keep up with your student loan payments. 

*A debt resolution programs is only applicable for unsecured debt.

Jackie Lam - Author

Jackie is an Achieve contributor. She is an accredited financial coach (AFC®) who has written for Business Insider, BuzzFeed, CNET, USA Today's Blueprint, and others. She coaches artists and freelancers.

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Kimberly is Achieve’s senior editor. She is a financial counselor accredited by the Association for Financial Counseling & Planning Education®, and a mortgage expert for The Motley Fool. She owns and manages a 350-writer content agency.

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