5 Strategies to Manage Your Student Loans

When it comes to managing student loans, you're far from alone when you lay awake at night, wondering how you're going to dig yourself out of debt.

An analysis released this week by the Consumer Financial Protection Bureau shows a staggering number of borrowers are struggling to repay their loans and are seemingly unaware of options that could them help avoid default or forbearance, according to The Wall Street Journal.

Here are five strategies for managing your student loans:

1. Apply for income-based repayment. Only about 10 percent of borrowers are enrolled in any kind of income-based repayment program, according to Politico. That's unfortunate, since the Obama administration has made such programs more generous than ever. Struggling borrowers can now pay 10 percent of their discretionary income each month. Based on your job sector, you can have your loans forgiven after 20 years (if you work in the for-profit sector) or 10 years (for those in nonprofit or government sectors).
2. Find out who currently holds your loans. The process of managing your loans is easier when you identify "the usual suspects" -- that is, who your loan servicers are. If you have current federal loans, then chances are they are not with the original lender, but have been sold on the secondary market. If you have current private loans, then they are likely held by the original lender.
3. Prioritize your payments. If you have the moola for it (which most of us don't), you may want to accelerate your payments. If not, you'll want to lengthen the term and focus on paying off higher interest debts first. Budgeting is essential. Review your income, expenses, and debt -- then speak to your lender about repayment options.
4. Explore deferment programs. Deferment programs allow borrowers to postpone payments while you're unemployed, attending school or dealing with other economic distress. It's an effective way to avoid defaulting on your loans and protect your credit history.
5. Apply for forbearance. If you don't qualify for a deferment, then you may be able to postpone or temporarily reduce your payments with a forbearance. Forbearance is less attractive than deferment, because whatever the type of loan, interest will continue to accrue.

For more tips, check out FindLaw's section on Student Loan Relief and download our free Guide to Student Loan Debt. You may also want to consult an experienced finance lawyer near you for personal advice on your particular situation.

Related Resources:

• Study: Half of $1 trillion federal student debt unpaid (CBS News)
• Student Loan Debt Statistics (American Student Assistance)
• Student Loans Stay With You For Life (FindLaw's Law and Daily Life)
• Woman's Asperger's Gets $400K in Student Loans Discharged (FindLaw's Law and Daily Life)