Pay Off Your Student Loans Smarter (and Faster)

Ever feel like you’ll be paying back your student loans for the rest of your life? You’re not alone; more than 57% of people with student loans  are concerned that they may be unable to repay that debt. Student loan debt can feel crushing at times, but there are many manageable ways to chip away at it. With these tips, you can work toward paying off your student loans smarter and faster.

Pay More than Your Minimum Student Loan Payment

One of the most effective ways to pay your student loans off quicker is to pay extra toward those loans each month. Paying the minimum required amount might be enough to keep you in good standing but that means it will still take you the entire repayment term to get out of debt.

Adding a little extra money each month toward your loans can make a big difference, and if you have the income to do this, you’ll save money on interest and time in repayment.

Make Additional Student Loan Payments Throughout the Year

If putting extra money toward your student loans each month isn’t possible, try making a few extra payments throughout the year. This is a great place to start if you’re still trying to figure out just how much you have left over in your budget each month. Set a goal to make an extra payment once every three or six months and see how that impacts your student loan debt.

Don’t Blow Raises and Bonuses

A bonus or raise at work can be thrilling, and it may be tempting to spend that extra money on some “splurge” items. If you receive an unexpected bonus or raise, though, and are not relying on the money for a specific need, you can spend it on your student loans. Doing this can really help to reduce your debt more and, if you put just the bonus or extra take home amount toward your loans, it won’t even impact your budget.

Make Some Extra Money to Put Toward Student Loans

If you feel like you don’t have enough income to contribute extra to your student loan payments, consider a part-time job to help with your budget. The best kind of part-time job is one where you get to do something you enjoy. For some people that means taking up tutoring, babysitting or music lessons. Others prefer to work at a restaurant or get a job at the mall (did somebody say discount?). Find something that works well with your lifestyle and schedule.

Just remember to make a plan to manage that extra income. Come up with a schedule for saving money or putting it directly toward the balance of a loan as you reach a certain amount. It can be very easy to spend money that is designated for loans if it’s just sitting around, so make sure you develop a good system for accountability.

Creative Ways to Make Extra Money

If you don’t want to commit to a part-time job, there are more creative ways to make money. Driving for a ride-sharing company allows you to earn some extra cash on your own schedule, without a set commitment. Or, you may be able to find freelancing work that fit with your skills; try searching the internet for freelancing gigs. Putting on a garage sale or selling higher-value items online or at a consignment shop can help you reduce your belongings while increasing your bank account. These are just a few unique ways to make extra money to pay down your student loan debt faster.

See if Loan Forgiveness Is an Option

Loan forgiveness is not necessarily too good to be true. Not all people are eligible for this benefit, but if you are eligible, loan forgiveness can save you thousands of dollars.

The federal government offers several loan forgiveness programs depending on your career and types of debt. However, there are lots of scams online about student loan forgiveness, so be sure to use a reputable source, like the Federal Student Aid website.

Many states also offer loan forgiveness programs for teachers, nurses and workers in other high-demand but lower paying fields. Be sure to check out what the state you live in offers as far as loan forgiveness programs. Another source is the financial aid office at the college or university you attended as those experts can help you find loan forgiveness or grant programs.

Budget to Save Money in Other Areas

Not sure how people manage to have left over money after bills, loans and fun? You should try budgeting! Budgeting is great because it establishes boundaries for your spending and helps you keep track of where your money is going. This monthly budget calculator can help you get started. When you’re not tracking your spending, you might not even realize just how much you’re spending on certain things.

Once you’re actively managing your spending, you’re more accountable and you’ll likely find you have more money to spend — money that you can put toward paying off loans, saving or investing.

Find Out if Refinancing Can Help You

Refinancing is an option anyone with student loan debt should look into as it’s one of the most effective ways to save money and pay off loans quicker without breaking the budget.

Refinancing your student loans is most worthwhile when you can lower the interest rate you’re paying or combine your loans into a single loan with a shorter term. Both of these cases can help you pay less in interest over the life of the loan.

Iowa Student Loan provides a simple and quick way to find out the rate you would qualify for with our refinance loan and it doesn’t impact your credit score. See if you qualify today.

If you have someone with good credit who is willing to cosign a new loan, you may qualify for an even better rate, saving you even more in interest charges.

Interested in learning more about our refinancing? Check out our beginner’s guide for refinancing.

Get Your Rate

Tips to Chip Away at Debt

Get creative! With a little bit of effort, your student loans will be gone before you know it.

Remember these tips to work toward paying off your student loans faster:

  • Pay more than the required minimum monthly payment amount.
  • Make additional student loan payments when you can.
  • Put any extra earnings or bonuses toward student loans.
  • Look at ways to increase your income or decrease your spending.
  • Consider refinancing your existing student loans.

By: Iowa Student Loan

Parent PLUS Loan Features, Benefits and Drawbacks: What You Need to Know

The parent PLUS loan is a federal loan that is just one option available to parents looking to cover outstanding costs related to college attendance. Before applying for a parent PLUS loan, carefully consider its features, benefits and drawbacks.

Features of the Parent PLUS Loan

  • Availability: The parent PLUS loan is available to biological and adoptive parents, and in some cases stepparents, of undergraduate students who do not have adverse credit history. Some colleges may include the PLUS Loan in a student’s financial aid; however, just because a PLUS Loan is included does not mean that parents are required to accept it.
  • Limits: A parent can borrow up to the cost of attendance, an amount that is determined by the student’s school, minus other financial assistance received by the student.
  • Interest rate: The parent PLUS loan has a fixed interest rate, which is 7.60% for loans taken out for the 2018–2019 school year. The rate for the 2019–2020 year will be set on July 1, and it may be helpful to note that the rate for new loans has increased each of the last three years.
  • Fees: An additional loan fee is calculated as a percentage of the loan amount (currently 4.248% for disbursements on or before Sept. 30, 2019) and is deducted from each disbursement.
  • Repayment: Borrowers may choose from different plans to repay the loan over a 10-year period. Loans of more than $30,000 are eligible for an extended repayment period that allows borrowers up to 25 years to repay the loan. Repayment generally begins as soon as the loan is disbursed, but parents may request to defer repayment while the student is enrolled at least half time plus an additional six months.

Benefits of the Parent PLUS Loan

  • Pre- and overpayment: Some borrowers choose to make extra payments to pay down parent PLUS loans more quickly and to reduce the amount of interest repaid. There is no penalty for paying extra on PLUS Loans.
  • Federal repayment options: Borrowers may choose from different federal repayment plans to fit their budget, but most income-driven repayment plans are not options for parent PLUS loans. These loans also have deferment and forbearance options for borrowers who have difficulty making payments; however, interest continues to accrue daily even when payments are not required. Unpaid, accumulated interest will be capitalized, or added to the loan balance, at the end of the deferment or forbearance period.
  • Death and disability: The loan can be discharged if the parent borrower dies or becomes totally and permanently disabled. In addition, the loan can be discharged if the student dies.
  • Cancellation: If a parent applies for a PLUS Loan, he or she can cancel all or part of the amount before the loan is disbursed to the school. After disbursement, borrowers have a limited time to cancel all or part of the loan amount by contacting the school’s financial aid office.

Drawbacks of the Parent PLUS Loan

  • Discharge: Federal parent PLUS loans are rarely discharged for financial difficulties resulting from unemployment, age-related or other illnesses and injuries, or bankruptcy.
  • Nontransferable: Parents cannot transfer the PLUS loan to their student to repay after they finish school. Parents and their students may be able to work together to refinance the loan in the student’s name through a private lender; although doing so will result in the loss of federal repayment options.
  • Timing: Many parents face high education debt burdens at a time of life when earning power generally decreases and limited income is needed for living or medical expenses. Defaulting on a parent PLUS loan can lead to the garnishment of Social Security benefits, tax refunds and wages.

Other Considerations Before Taking Out a Parent PLUS Loan

The following items could be considered a drawback or a benefit, depending on personal and other circumstances.

  • Qualification: Approval for a PLUS Loan does not take into consideration a parent’s income, other outstanding debt, assets or years until retirement, so parents should carefully consider how much they can realistically repay.
  • Interest: The fixed interest rate will not increase during the life of the loan, but borrowers also won’t be able to take advantage of lower market rates in the future unless they refinance with a private lender.

Before taking on a parent PLUS loan, you should also compare it to other options, such as our College Family Loan, which is a private education loan with a cosigner option and that features lower rates than the parent PLUS loan as well as no fees.

Interested in the benefits of our College Family Loan? Check out the details here.

By: Iowa Student Loan

Plan for Total College Costs; Enter to Win

Use the free College Funding Forecaster online tool now through April 30 and enter for a chance at one of 10 $1,000 awards.

The College Funding Forecaster helps you get a clearer picture of the total costs, aid and shortfalls over four years using freshman year financial aid award information, as well as family contributions and outside scholarships and grants.

How to Use the College Funding Forecaster

Follow these simple steps to get started:

  1. Gather up your financial aid award information from the college(s) and any information about scholarships received from schools or outside organizations.
  2. Go to IowaStudentLoan.org/Forecaster.
  3. Enter in the college’s financial information as well as information about your family’s earnings and savings and any outside awards.
  4. Review year-by-year estimates and make adjustments for your own situation. For example, living off campus after sophomore year may cost less than living on campus. Or you may be expecting to earn more after the first year of college.
  5. Review the results, as well as the informational tips on how to address funding shortfalls.
  6. Enter your information at the end of the tool to be included in the drawings.

Awards for College

Iowa high school seniors and their parents and guardians can enter the giveaway for a chance at one of 10 $1,000 awards paid to the college on behalf of the winning students.

Use the tool and enter the giveaway today! 

Learn More About the Tool

By: Iowa Student Loan

Understanding Your Financial Aid Award Package

While college acceptance letters are often exciting, the arrival of financial aid award packages can be confusing. Keep these five things in mind as you review your financial aid awards to limit stress.

Financial aid is not all free money.

Depending on the college or university, financial aid may be presented under one large heading or broken down by type. Remember that work-study and loans, including federal and supplemental loans, are also part of financial aid packages. Work-study requires you to find and obtain work on campus, and loans must be paid back with interest after you graduate or leave college.

Cost of attendance varies by college.

Like the types of aid offered, college costs may be presented differently by different institutions. Tuition and fees may be grouped together or separated; room and board may be called housing and meals; and estimated expenses for books, transportation and miscellaneous may or may not be listed. You may also see tuition, fees, housing and meals listed as direct costs, while other expenses are shown as indirect costs because they are not billed by the school. Remember, many indirect costs are estimates or averages, and you may spend less or budget more depending on your situation. Be sure you understand what is included in each category to get a true comparison between schools.

Work-study requires work now.

If your award package includes a line for work-study, don’t assume the college will have a job waiting for you when you arrive on campus in the fall. As soon as you decide on a college, touch base with the financial aid office to determine what steps you need to take to get a job on campus. Then, apply for the job(s) you are interested in or seek out other opportunities to count on that money coming in once you start classes.

Outside scholarships may impact your award package.

You need to report any scholarships or grants you receive from sources outside of the government or college to the financial aid office. While those outside scholarships may reduce the aid you’re eligible to receive, they can also help you borrow less if you need loans, so don’t be afraid of finding as much outside free money as possible.

Expenses may increase and free aid may decrease after your freshman year.

College tuition, on-campus housing and meal plans will likely cost more each year you’re in school. Grants and scholarships you’re offered to attend a college as a freshman, on the other hand, may decrease in future years. Find out if scholarships and grants are for one year or if they are renewable. If they can be renewed each year, be sure you understand any requirements you must meet to keep those awards. Also, be aware that maximum federal loan amounts may increase every year you’re in college, but those funds will need to be paid back with interest in the future. It is a good idea to estimate total college costs to earn your degree so you can make a realistic plan to pay for your entire college career.

By: Iowa Student Loan

Tips for Landing a Scholarship (Infographic)

As you enter your last few months of high school, the pressure’s on to figure out how to pay for the next stage of your education. Improve your chances of landing scholarship funds with these tips.

TipsLandingScholarship-infographic

Download a PDF of this infographic.

Beef up your qualifications.

Try a new extracurricular activity, volunteer and bump up your GPA to qualify for more scholarship funds and increase your chances of earning those scholarships.

Update your information.

As you accomplish more, update your qualifications listed for your accounts on scholarship search sites, such as scholarships.com, bigfuture and Fastweb, to find more results.

Keep searching for new opportunities.

Perform new searches through free scholarship sites on a regular basis. Remember, many non-academic entities offer scholarships and make information available at different times of the year.

Touch base with your support crew.

Let teachers, coaches and family friends who have agreed to write letters of recommendation or proofread essays know when you will need help. Allow them enough time to help you while still meeting all their other commitments, and offer to help any way you can.

Stay on top of deadlines.

Plan your priorities to ensure you submit applications and supporting materials before their due dates.

Reread all your upcoming scholarship submissions.

Check for any typos, make sure you’ve followed all instructions and submit everything required.

File for financial aid.

If you haven’t yet, complete and submit your Free Application for Federal Student Aid (FAFSA). This is a primary tool to qualify for scholarships awarded by colleges. If you need help completing your FAFSA, contact the Iowa College Access Network or attend a free Iowa College Goal Sunday event near you.

Contact your college.

If your FAFSA doesn’t accurately reflect your financial situation or if you have questions about scholarships available at your college, contact the college’s admissions or financial aid office. Also let the admissions office know if the final price tag will make the difference in your college choice; the school may have some flexibility in scholarship awards.

By: Iowa Student Loan

Grand Prize Winners Announced in College Funding Forecaster Giveaway

Eighteen new Iowa high school graduates and three younger students recently received monetary awards to help cover educational expenses after they or their families completed a free online tool to estimate the total cost of a four-year undergraduate degree.

Iowa high school students, and their parents or guardians, were able to enter their information for the drawings after completing the College Funding Forecaster between March 5 and May 11, 2018. This free consumer education tool provided by Iowa Student Loan® uses information from students’ freshman year financial aid award packets, as well as outside scholarships and grants and family savings and earnings, to project estimated costs, funding gaps and potential student loan debt over four years.

“We really feel this tool is vital to help families plan for a complete undergraduate education,” said Christine Hensley, chair of the Iowa Student Loan board of directors. “We use the Giveaway contest to draw attention and expose families to the tool’s features, which help them estimate total costs over four years as part of an overall plan to minimize student loan debt. We are pleased to see so many families entering after going through the module this year.”

More than 900 qualifying entries were received from all over the state, representing nearly 280 Iowa high schools.

Sixteen 2018 Iowa high school graduates met the requirements to each claim an award of $250 for education expenses after having their names randomly chosen in weekly drawings. They are:

Student Name High School
Everett Willson Burlington High School
Jordan Larson Gehlen Catholic High School
Sadie Brockett Gladbrook-Reinbeck High School
Nathan Butler Highland High School
Madison Sommers Indianola High School
Rachel Strang Iowa City High School
Aaron Howe MOC-Floyd Valley High School
Owen Meyer North Cedar High School
Erin Goraczkowski North Union High School
Erech Hazen Norwalk High School
Abby Crowner Notre Dame High School
Andraya Sowers Pleasantville High School
Reece Suter Rock Valley High School
Nicholas Resch Spirit Lake High School
Madeline Moen Vinton-Shellsburg High School
Renee Kerr Wilton High School

Three younger students also fulfilled the requirements to claim one of the weekly drawing awards.

Student Name High School
Bethany Kallio (high school class of 2021) Ballard High School
Grace Reekers (high school class of 2021) Belle Plaine High School
Dahlyn Ott (high school class of 2019) South Winneshiek High School

In addition, two high school seniors’ names were randomly drawn by an independent third party to each receive a $1,500 scholarship award to the colleges they will attend this fall.

Student Name High School
Marissa Tunning Carroll High School
Drake Beller Sioux City North High School

The College Funding Forecaster is available online at www.IowaStudentLoan.org/Forecaster. The tool allows families to customize both expenses and available funding to adjust results for changes in students’ situations over the four years. The results show yearly and total estimated costs of attendance, available funding and projected funding gaps. The tool also provides informational tips on how to reduce costs and potential debt.

By: Iowa Student Loan

Student Loan Pro Tip: First Year Salary (Video)

Borrowing more than you can comfortably afford to pay back is setting yourself up for a difficult financial future. A simple rule to follow is not to borrow more to pay for college than your expected first year salary.

To learn more about student loans and avoiding debt, check out our Smart Borrowing resources: http://www.iowastudentloan.org/smartborrowing.

By: Iowa Student Loan

PLUS Loan Basics: What You Need to Know

The federal Direct PLUS Loan for parents is a common option for families who need more money to pay the full cost of college. It’s often included in colleges’ financial aid award packets to make up the difference between other types of aid and the cost of attendance but, like student loans, you are not required to accept a PLUS Loan.

Before taking out a PLUS Loan, carefully consider its features, benefits and drawbacks.

Features of the PLUS Loan

  • Availability: The PLUS Loan is available to biological and adoptive parents, and in some cases stepparents, who do not have adverse credit history.
  • Limits: A parent can borrow up to the cost of attendance amount determined by the student’s school minus other financial assistance received by the student.
  • Interest Rate: The PLUS Loan has a fixed interest rate, currently at 7.00% for the 2017–2018 school year. The rate for the 2018–2019 year will be set on July 1.
  • Fees: An additional loan fee is calculated as a percentage of the loan amount (currently 4.264% for disbursements on or before Sept. 30, 2018) and is deducted from each disbursement.
  • Repayment: Borrowers may choose from federal repayment plans to repay the loan over 10 to 25 years. Repayment generally begins as soon as the loan is disbursed, but you may defer the payments while the student is enrolled at least half time plus an additional six months.

Benefits of the PLUS Loan

  • Cash flow: Obtaining a PLUS Loan before a college bill is due allows some parents to pay for the entire term without financing fees or late penalties and then make payments on the loan as cash becomes available during the term.
  • Pre- and overpayment: Some parents choose to make extra payments without penalty to pay down PLUS Loans more quickly and to lessen the impact of interest.
  • Federal repayment options: You may choose from among federal repayment plans (not all are available for PLUS Loans). PLUS Loan servicers also offer deferment and forbearance options if you have difficulty making payments, but be aware that interest continues to accrue daily even when payments are not required and unpaid, accumulated interest will be capitalized, or added to the loan balance at the end of the deferment or forbearance period.
  • Death and disability: The loan can be discharged if the parent borrower dies or becomes totally and permanently disabled. In addition, the loan can be discharged if the student dies.
  • Cancellation: If already taken out, you can cancel all or part of the amount before the loan is disbursed. After disbursement you have a little time to cancel all or part by contacting the school financial aid office.

Drawbacks of the PLUS Loan

  • Discharge: Federal PLUS Loans are rarely discharged for financial difficulties resulting from unemployment, age-related or other illnesses and injuries, or bankruptcy.
  • Nontransferable: You cannot transfer the PLUS Loan to your student to repay after your student finishes school. You and your student may be able to work together to refinance the loan in the student’s name through a private lender; doing so will result in the loss of federal repayment options.
  • Timing: Many parents face repayment of heavy loan debt burdens at a time of life when earning power generally decreases and limited income is needed for living or medical expenses. Default on a PLUS Loan can lead to the garnishment of Social Security benefits, tax refunds and wages.

Other Considerations Before Taking Out a PLUS Loan

The following items could be considered a drawback or a benefit, depending on personal and other circumstances.

  • Qualification: Approval for a PLUS Loan does not take into consideration income, other outstanding debt, assets, income or years to retirement, so consider carefully how much you will realistically be able to repay.
  • Interest: The fixed interest rate will not increase during the life of the loan, but you won’t be able to take advantage of lower market rates in the future.

Before taking on a PLUS Loan, you should also compare it to other options, such as our College Family Loan.

By: Iowa Student Loan

Winners Announced for 2017 Save Now, Save Later Program

Parents across the state of Iowa are getting a $1,000 boost to their student’s College Savings Iowa® account this winter, thanks to Iowa Student Loan’s Save Now, Save Later: College Savings Plan Parent Giveaway.

Fifty parents have been chosen as winners in the program’s fourth year. Each parent will receive the $1,000 deposited directly to the College Savings Iowa account of their registered child. The registration period ran during September and October and was open to Iowa residents who have a student in grades six through 12 at an Iowa school.

“This program really helps highlight the importance of saving for college and being proactive with planning for your child’s future,” said Shari Higgins, a 2017 winner from Nevada. “The information presented was useful and something I can come back to later as I have questions.”

Parents who registered had a chance to experience the Parent Handbook, a new online educational module from Iowa Student Loan. The handbook provides financial literacy tips for parents with students in middle school or high school.

After the registration period, entries were chosen at random from nearly 4,000 qualified participants. Iowa Student Loan works directly with College Savings Iowa on the giveaway. College Savings Iowa is the state’s direct-sold 529 program, administered by State Treasurer Michael Fitzgerald.

Winners of the Save Now, Save Later program:

Name City Name City
Kelsey Lorenzen Davenport Kristin Johnson Urbandale
Erika White Vinton Shari Higgins Nevada
Dawn Atwood Colfax Heather Kingsbury Vinton
Shanan Redinger Hanlontown Jennifer Sassman Waverly
Rhonda Sirfus Johnston Jennifer Tischer Mount Vernon
Michele Foreman Cedar Rapids Mary Hauptmann Algona
Kelly Willis Waverly John Flint Cedar Falls
Melissa Korell New Sharon David Finley Estherville
Rhea Wright Perry Karen Hamilton Council Bluffs
Rosely Imler Knoxville Susan Swartzendruber Knoxville
Amanda Lawless Saint Lucas Jason Carlson North Liberty
Jamie Carlson Guthrie Center Mary Dietrich Pleasant Hill
Sara Laures Cedar Falls Amy Carlisle Griswold
Amy Wilson Coralville Tami Wise Urbandale
Andrea Juergens Adel Lee Brungardt Council Bluffs
Dawn Gunderson Muscatine Nicole Metcalf Climbing Hill
Jody Fairbanks Anamosa Mundi McCarty Solon
Stephanie Gengler Merrill Julie Borelli Carroll
Andrea Masteller Clive Angela Beer Cedar Rapids
Amanda Salyars Muscatine Christina Hlas Adel
Eric Kovaleski Bouton Gayle Shatek Mason City
Kathy Oulman Forest City Regina Critchlow Carlisle
Tim Bloom Newton Tracie Rogiers Buffalo
Thomas Evans Dubuque Jody Sturmer Blue Grass
Amy Hammer Cedar Falls Scott McCarty Ottumwa

By: Iowa Student Loan 

 

New Tool Helps Students Make Informed Grad School Decision

Iowa Student Loan Encourages Grad Degree Candidates to Consider Future Debt

Iowa Student Loan has a new online tool to help students make informed decisions about their borrowing levels and their ability to successfully repay new student loan debt when considering the pursuit of an advanced degree.

The Grad Degree Gauge is a free tool available online.

Users are encouraged to consider their current and potential annual salaries with and without the new graduate degree; previous and future borrowing to pay for their education; and opportunities in a career associated with the intended graduate degree.

“I felt [the Grad Degree Gauge] was extremely helpful,” said Jordan Doetkott, a first-year graduate student studying organizational leadership at Grand View University in Des Moines. “It was very user friendly and a great asset to someone pursuing a master’s degree….it was straightforward and easy to navigate.”

The results are displayed as a number on a 0–100 gauge. The overall result is a composite of four indicators:

  • Current student loan debt in addition to maximum advisable new student loan debt
  • Anticipated salary change from the amount expected to be earned by holders of the previous degree, or the user’s actual salary if the user is currently in the workforce, to the amount expected to be earned by holders of the intended graduate degree
  • Number of new jobs in the indicated career by 2024 as projected by the U.S. Department of Labor’s Bureau of Labor Statistics
  • Percentage of people working in the indicated career who have a graduate degree as indicated by the BLS Occupational Employment Statistics

“A lot of factors can come into play when people decide whether it makes sense to pursue an advanced degree,” said Steve McCullough, president and CEO of Iowa Student Loan. “We want the ability to repay student loan debt to be one of the main things that students think about, whether they are continuing their education straight from a previous degree or going back to school after being in the workforce.”

 

Additional Resources
Also being debuted by Iowa Student Loan is the Parent Handbook, which consists of valuable tips that help families of students in sixth through 12th grades prepare for success in college and other postsecondary options. The Handbook is designed to address common questions and provide a roadmap for academic and financial success.

By: Iowa Student Loan

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