Last Updated on Mar 12, 2020 by James W
As of this year, over 60% of students across the country graduate with outstanding debt. That’s millions of graduates all entering the workforce with student loans to pay off. If you’re about to begin or have recently begun paying off your student loan debt, here are a few things you may not have realized about student loans.
- Interest can be tax-deductible.
You may not have realized that the interest you’re paying on your loan might be tax-deductible. You first have to qualify, and this usually means coming from a low to a middle-income household. If you do qualify, you may be entitled to as much as £2,500 of interest paid per tax year. This will substantially aid you in your finances, so it’s definitely worth going through the process to see if you’re eligible for this tax deduction.
- You may be eligible to refinance your loan.
If you’re lucky enough to have a steady, decently paid job and a good credit score, you’re probably eligible for a refinancing plan. This means you take out a new loan with a new lender and new terms to pay off your current student loan. Companies like Elfi are offering much lower fixed or variable interest rates compared to the current federal rates. By refinancing your loan, you’ll likely save a large sum of money in the long run, and you’ll have the opportunity to come up with a new repayment plan that suits your current finances.
- Loan forgiveness programs
If you have a federal loan, and you’re really struggling to meet your repayment plan, you might be eligible for one of their loan forgiveness plans. If you’re employed by the government, for instance, and you’ve made 120 payments already, you may be forgiven for the rest of your loan balance. If you’re a teacher, you may also qualify for a similar program. There’s a range of other forgiveness programs that are worth researching. If you have a low-income job, you may very well qualify for some sort of forgiveness.
- If you’re currently in education, it’s not too late to apply for a loan.
If you’re currently a student, but decided not to apply for a loan to help you fund your way through school, you can still apply. Student life can be expensive, and you may find yourself in need of more cash to see you through your studies. There are many loan options still available for you, so do look into your options if you’re struggling.
- It’s never too early to start paying interest.
Remember, you can start paying interest while you’re in school. By making these payments now, you’ll avoid being surprised by a hefty amount of interest accrued upon graduating. Staying on top of your loan while you’re in school will mean you know what to expect and can start planning before you feel overwhelmed.
