Part of the reason that student loans are such a major issue in many American households is that people don’t understand them. This lack of understanding can cause people to give up on ever paying back their debt and it creates a much worse situation.
While student loans can be a rather complicated subject, most borrowers can manage their debt on their own. The trick to getting student debt under control is to find a plan that works for your individual circumstances. For this reason, research and an understanding of options is critical. If you get bad info, you can make some big mistakes.
Unfortunately, there a plenty of places to go to get bad information…
Friends and Family
Friends and family are often well intentioned when they offer student loan advice, but it can be horrible advice.
The problem with seeking the advice of your loved ones is that their loan situation could have been much different than yours. For example, management of private loans versus federal loans is very different. Even within the area of federal loans, there are a number of different loan types and options. You may have options that your friend doesn’t qualify for. You may also not qualify for programs that your friends do qualify for.
Because this debt is so individualized, it is critical to understand your loans, and not base your decisions upon what somebody else did with their loans.
Your Student Loan Company
While you can get important and useful information from you lender, it is also critical that you know the limitations of that information.
Your lender can tell you the repayment plans that you qualify for and when you have a deadline, but they are poorly equipped to offer advice on strategy. The lenders simply lack the training to reliably offer advice on student loan repayment strategy. Furthermore, because they only know a portion of your finances, they don’t really have enough information to help you devise an ideal student loan plan.
Third Party Loan Management Companies
These companies are constantly popping up, and it is almost always a bad idea to do business with them. Most of the time they are charging you money to enroll in free government programs.
Sadly, most of these companies are scams of some sort and unlikely to offer any genuine help when it comes to managing your student debt.
So where do you go?
If the friends and family, your lender, and other companies are not good places to go, what is left?
The important thing left is you the borrower. Without question, you are in the best position to evaluate your debt an make a plan. You know what your financial goals are. You have the best idea of what your financial future looks like. You also know your budget better than anyone else.
Because you are the foremost expert on your finances, your only challenge is to learn the rules of the road for student loan management. Once you learn about all the options you have, you can make the best student loan plan
Don’t defer to others when it comes to the strategy to attack your student debt. Ask around to find out what others are doing and to learn the basics, but as you learn more, think about how it applies to your situation. This is the sort of analysis you can do better than anyone else.