Student Loan Series: What You Need to Know About Student Loans

The student loan crisis is nothing new. But that doesn’t mean its effects aren’t profound.

For years headlines and news stories have reported the uptick in student debt and the impact it has on people for the rest of their lives. Student loan debt is a big issue in our country and with the cost of education on the rise, it becomes an even more important topic to discuss. 

Today, our team wanted to bring you up to speed on what you need to know about student debt: what it is, how to prepare for it, and ways to keep the costs at bay. 

Startling statistics

Student debt is on the rise. According to the most recent data from the Federal Reserve, the country is in over $1.64 trillion dollars of student debt alone across about 45 million borrowers and this number is projected to increase.

To put those numbers in perspective, student loan debt has become the second-highest consumer debt category behind mortgage debt and surpassing credit card debt by almost $600...

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Student Loan Series: How can I pay off my student loans with low income?

This post is part of our “Ask An Advisor” series where we address your most urgent money questions. Names have been changed to protect the identity of the requester.

How can I possibly get out of student loan debt? (It’s over 50,000. I was not able to complete my last year of college due to finances. I can't find work willing to pay more than $12 where I'm located.)

Dear Ashley,

First, let me sympathize with your situation. Both Angela and I worked while in college and had to maintain our GPAs to keep our scholarships. Completing your schooling while balancing other responsibilities is hard and not always feasible. You should be proud of yourself that you made it through most of your schooling even if you weren't able to graduate yet.

That leads me to my next point, which is the emphasis on the "yet." It sounds like you are looking for work right now, or maybe you are already working in a job that's paying lower wages than you'd need to pay the bills. As you've...

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Student Loan Series: Student Loan Forgiveness Options

Student loan forgiveness may sound like a fairy godmother swooping in and saving the day, but her magic wand comes with layers of government red tape and rules to wade through before your loan balance hits $0. 

Today, we want to walk you through the basics of a few loan forgiveness programs that provide student debt relief. Let’s get started.

Public Service Loan Forgiveness (PSLF)

PSLF was designed to help employees in public service repay their loans. Here’s how you can qualify for this program:

  • Full-time employment for U.S federal, state, local, or tribal government or non-profit.
  • Have Federal Direct loans
  • Payments made through a qualified income-driven repayment plan (remember those?). 
  • Make 120 qualifying payments

After 10 years (assuming you make the qualifying payments consecutively), your loan balance will be forgiven. This system can be complex and depending on your provider, the information could get lost in the shuffle. We recommend keeping all...

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Student Loan Series: What Are My Income-Driven Repayment Plan Options?

Not all student loan payments are created equal. While standard repayment terms consist of 120 consecutive payments over 10 years, there are a number of different options for people to repay their debt with a much smaller monthly payment. 

Federal loan borrowers are able to take advantage of income-driven repayment options, which cap monthly payments as percentages of your income and extend the period of repayment to 20 or even 25 years. There are four options to consider:

  • Pay As You Earn (PAYE)
  • Revised Pay As You Earn (REPAYE)
  • Income-Based Repayment (IBR)
  • Income-Contingent Repayment (ICR)

Let’s see how each of these work and which might be right for you.

Pay As You Earn

PAYE caps your student loan payment to 10% of your discretionary income but it never exceeds the amount you would have paid in a standard 10-year repayment plan. This makes PAYE a good option for those consistently making a lower salary. 

The repayment term is 20 years, after which time the...

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