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Stressing Over Student Debt?

1. Pay Down the Lowest Balance First

While there are a variety of strategies regarding the best way to pay down different kinds of debt, the “debt snowball method” is one of the most popular avenues recommended by financial experts for paying off debt.

According to this approach, you simply pay off the accounts with the smallest balances first. While this may seem to run counter to common sense if you have larger debts with higher interest rates, the psychological benefits gained from making progress add up to peace of mind and forward momentum.

After all, while making payment after payment toward chipping away at a large balance may want to make you throw your hands up and give in, there’s great satisfaction to be found in paying even a small debt down to zero and crossing it off your list.

2. Check For Repayment Programs

If you’re dealing with loan payments which have become unmanageable, several federal repayment programs exist aimed at offering relief, including graduated, extended, income-based, and pay-as-you-earn repayment plans.

One thing to keep in mind about these programs? You’ll still have to pay back your loans, which may end up costing you more over time due to the total interest paid. In the meantime, however, you’ll enjoy invaluable breathing room while you explore avenues for getting caught up.

Don’t qualify for a federal loan? Look into private lenders instead.

Regardless of the repayment program you choose, one element is critical: keep your loan servicer in the loop. If you are in danger of falling behind on your payments or not making a payment at all, inform your lender immediately. Think of it this way: They don’t want you to default on your loans any more than you do.

3. Know Your Loans

All loans aren’t created equally. The more you know about your loans, the more you’ll ultimately understand about how to repay them.

In the U.S., for example, students have several handy options for tracking their loans. The National Student Loan Data System (NSLDS) maintains a convenient database of all federal student loans, while credit reports reflect all private loans. In order to make sure nothing falls through the cracks, maintain an updated list of all of your loans, lenders, balances and repayment statuses.

4. Consider Consolidation

If you’re struggling under the weight of multiple loans with high-interest rates, loan consolidation may offer a money-saving solution. While consolidation is not likely a solution for recent borrowers, it can be a life-saver for those with lingering loans.

However, be sure to do your research and read the fine print before accepting a consolidation loan to spare yourself any unpleasant surprises in the future.

 5. Resist the Urge to Panic

Dealing with any amount of debt is no fun, but dealing with crushing debt during a time of emergency can send you into a full-on panic attack. If health problems, unemployment, or other issues are interfering with your ability to pay your loans, don’t freak out. There are resources available to help you, including deferments and forbearance. While neither of these may be ideal, they may be the temporary solution you need to get back on your feet.

6. Get Creatively Employed

Finding the right job can offer unexpected relief from student loans. For example, full-time public service employees in the U.S. may qualify for Public Service Student Loan Forgiveness (PSLF).

Additionally, some private sector employers will also consider including student loan repayment reimbursements as part of your benefits package or as a replacement for tuition reimbursement programs.

Although choosing a job based on whether it will offset or eliminate your debt may involve you taking an unexpected career turn, it can also offer critical relief — which may make the detour well worth your while.

The truth is that student loans are a fact of life for many students. However, overwhelming stress from dealing with these loans doesn’t have to be part of the equation. These six steps can help you wrangle your loans into positive strategies for debt relief and financial freedom.