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  • Writer's pictureJames Heinz

Strategies for Managing Your Student Loan Debt

Student loan debt has become a harsh reality for millions of Americans. This financial burden can cast a long shadow, impacting major life decisions and overall wellbeing. However, with the right strategies and mindset, you can take control of your student debt and pave the way for a brighter future.

But how to manage student loans?

Staying organized and proactive is key when it comes to managing student loans. Ignoring the problem will only lead to more stress and potential consequences down the line. By taking charge now, you'll be better equipped to tackle the challenges and find the best solutions for your unique situation.

Effective Strategies for Paying Off Student Loans

how to manage student loans

You can employ several strategies to chip away at your student loan debt more efficiently.

  • Make overpayments whenever possible. Even small additional amounts can help reduce the overall loan duration and save you money on interest charges.

  • Adopt a biweekly payment schedule. By making half of your monthly payment every two weeks, you'll end up making the equivalent of one extra monthly payment each year.

  • Enroll in autopay to reduce your interest rates. Many lenders offer a small interest rate reduction for borrowers who set up automatic payments.

  • Explore refinancing or consolidating your loans. This can help you secure a lower interest rate or more favorable repayment terms.

  • Apply the debt avalanche method. Focus on paying off your highest-interest loans first while making minimum payments on the rest.

  • Take advantage of employer loan repayment assistance programs if your company offers them.

  • Look into federal loan forgiveness and repayment support options like income-driven repayment plans or Public Service Loan Forgiveness.

For those considering consolidation, consulting with experts at Shepherd Outsourcing can help you secure the best terms possible, with a personalized approach to managing debt!

Managing Loans While in College

how to manage student loans

If you're currently a student, there are several steps you can take to minimize the impact of student loans.

Borrowing only what is necessary and minimizing loan amounts

  • Before taking out student loans, carefully evaluate your actual costs and expected family contributions.

  • Only borrow what you truly need to cover tuition, fees, room and board, books, etc.

  • Minimize debt by applying for scholarships, grants, work-study programs, and seeking out affordable housing and transportation options.

Paying interest during college to prevent debt growth

  • While you aren't required to make payments on student loans while enrolled, the interest still accrues.

  • Making interest-only payments prevents that interest from being capitalized (added to the principal balance) when you enter repayment.

  • Even small interest payments each month can save you hundreds or thousands down the road.

Securing work-study or part-time jobs to fund loan payments

  • Look into federal work-study programs that allow you to earn money for educational expenses.

  • Part-time jobs, paid internships, and summer employment provide income to put towards loans.

  • Budgeting a portion of each paycheck towards current or future loan payments chipsaway at debt.

Seeking assistance from the financial aid office for guidance

  • Your university's financial aid advisors are invaluable resources for student loan management.

  • Meet with them regularly to understand your full aid package and repayment requirements.

  • Discuss options like deferment or forbearance if you anticipate struggles making payments.

Budgeting and Financial Planning

Effective budgeting and financial planning are crucial for successful student loan management.

Importance of creating a monthly budget

  • A realistic monthly budget is the foundation for any effective debt repayment plan.

  • Track your income sources and outline necessary expenses like rent, utilities, food, etc.

  • Factor in your student loan payments and identify areas to cut back on discretionary spending.

Incorporating loan repayments into financial planning

  • As you map out your short and long-term financial goals, student loans must be accounted for.

  • Build a strategy to make consistent, affordable payments that fit your overall plan.

  • Evaluate ways to pay extra when possible through career advances, unexpected windfalls, etc.

Taking advantage of the student loan interest tax deduction

  • You can deduct up to $2,500 annually in student loan interest paid from your taxable income.

  • This deduction is available for both federal and many private student loans.

  • Claim it on your tax return each year for added savings while making loan payments.

Contacting loan servicers for repayment plan adjustments

  • If you experience financial hardship, reach out to your loan servicer promptly.

  • Explore options to postpone or reduce your monthly payment amount temporarily.

  • Income-driven repayment plans can tie your payment to your current discretionary income.

Avoiding and Handling Loan Default

Defaulting on your student loans can have severe consequences, including damage to your credit score, wage garnishment, and loss of federal aid eligibility. To avoid this scenario:

  • Understand the triggers for default, such as missing multiple consecutive payments.

  • Explore options like deferment, forbearance, or income-driven repayment plans to prevent default during financial hardship.

  • If you've already defaulted, contact your loan servicer immediately to discuss ways to get back on track and rehabilitate your loans.

Shepherd Outsourcing can assist you in exploring all options to avoid default through tailored debt management solutions!

Income-Driven Repayment Plans

Income-driven repayment (IDR) plans can be a lifeline for borrowers struggling with high monthly payments. These plans base your payment amount on your income and family size, offering relief when funds are tight.

  • IDR plans can significantly lower your monthly payments, easing the burden.

  • The government has proposed automatic IDR recertification to simplify the annual income verification process. Subject to legislative approval, this may become effective.

  • Parents with PLUS loans may become eligible for IDR plans if the loans are consolidated into a Direct Consolidation Loan.

Utilizing Resources and Avoiding Scams

As you swim through the currents of student loan management, it's essential to take advantage of legitimate resources and steer clear of scams.

  • The U.S. Department of Education and your loan servicers offer a wealth of information and assistance programs.

  • Be wary of companies promising quick loan forgiveness or debt elimination for an upfront fee – these are often scams.

  • Consider seeking free credit counseling from reputable organizations for personalized debt management guidance.


Hopping on the journey to conquer your student loan debt can be quite a task, but with the right strategies and mindset, you can pave the way to a brighter financial future. By staying organized, exploring all available options, and seeking legitimate assistance when needed, you can take control of your debt and ultimately achieve the freedom you deserve.

Shepherd Outsourcing assists you throughout this journey. 

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