College was fun. But now the bill has come due. American students have over $1 trillion in student debts. The debt burden college graduates have is a substantial obstacle to personal financial progress, but you likely already know that. There are strategies you may want to consider in lightening the weight.

LOOK INTO PUBLIC SERVICE LOAN FORGIVENESS

For people working in government, non-profit and other public service jobs, certain federal loans may be forgiven after 10 years of qualifying payments. Many individuals are not even aware that they qualify for the program.

VOLUNTEER

There are a number of programs, e.g., AmeriCorps, Peace Corps and Military service, whereby such service will accrue a benefit that reduces an outstanding loan balance in an amount that varies with each program

INCOME-BASED REPAYMENT PLAN

Your payments on eligible federal loans can be capped at a percentage of your income, if you have a partial financial hardship, which is defined as monthly repayment amounts in excess of the level calculated under a 10-year standard repayment plan. If you make such payments and meet other requirements, any remaining balance will be forgiven after 25 years of qualifying
repayment.

PRE-PAY PRINCIPAL

Pre-payment of principal will help lower the lifetime interest costs of a loan. Of course, the challenge for many young workers is that they may not have the cash flow to make pre-payments.

Consider ways to raise cash specifically for such pre-payments. Do you still receive birthday and holiday presents? Ask for cash instead. Did you receive a raise, bonus or overtime pay? Direct unexpected cash flow to pre-payments.

Student debt can be overwhelming. It may seem, at times, like you’ll never get past it. Don’t despair. Remember, time is in your favor. As you gain work experience, the economy improves and Baby Boomers retire, opportunities for economic advancement will emerge and help you move ahead.

 

Jerry Maldonado

Jerry specializes in retirement, insurance and tax off-set strategies for professionals and small business owners. His focus is to help clients identify their definitions of legacy and financial security while simultaneously implementing innovative strategies to help make those financial goals a reality. For more information on his services, he can be reached at:

JGM Consulting LLC

[email protected]

(951)858-0798 Lic#0H33733

www.jgmconsultingllc.com