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Tackling Student Loans

Tips for managing student loan debt and reducing financial hassles

If you are still paying off a student loan, you are not alone. 1

· $1.75 trillion: total student loan debt

· 43.4 million: Americans carry student loan debt

· $37,113: average student loan balance

Best practices to pay down student loans

Interest Rate:

Compare your student loan’s interest rate to those offered by banking institutions or reputable loan companies. Reducing interest rates – and consolidating loans – can help lower your monthly payments.

Repayment Plan:

Although you had a specific plan when you first began repaying your student loan, you can change repayment plans at any time – for free. Contact your loan servicing company to discuss repayment options. As with all debts, compare interest rates and pay more aggressively on the loan with higher interest.

Loan Consolidation:

The Department of Education may allow you to consolidate multiple federal education loans to simplify payments and potentially lower monthly payments by extending the term of service, as well as transferring variable interest rates into a fixed rate.

Note: Consolidation can cause you to lose certain benefits, so review your options and determine the best course of action. 2

Forgiveness Programs:

In some scenarios, federal student loans may be forgiven, cancelled, or discharged, which means you are no longer responsible to repay some or all of your loan.

  • Examples of qualification include being employed in certain jobs, having your higher institution permanently close, or if a disability or death of the borrower occurs.

  • Public Service Loan Forgiveness can reduce or eliminate federal student loans after a period of time if certain criteria are met.

  • Almost all states also offer forgiveness programs, usually tied to employment in a specific sector and requiring some type of commitment.3,4

What Not to Do

Forbearance Programs:

The government provided relief for borrowers during the COVID-19 pandemic by pausing repayments and lowering the interest rate to zero for a specific period of time. However, general forbearance programs should be avoided even though you’re allowed to pause payments or make lower payments. Taking this step just pushes debt to the future and loans continue to accrue interest.

Alternative: Consider income-driven repayment programs, which bases your monthly payments on income and family size.5

Interest-Only Payment Plans:

As the term indicates, the borrower pays only the interest on the loan every month they are in school and during the separation or grace period. But to pay down the principal, you should always try to apply payment above and beyond just paying the interest. Otherwise, you are prolonging the inevitable repayment of the loan.

Note: Federal student loans do not offer an interest-only payment.

Ready to start tackling student loans?

Next steps:

  1. Review your student loan(s) and interest rates

  2. See if you qualify for any forgiveness programs

  3. Create a plan of action to begin paying down student loan debt successfully

This presentation is not an offer or a solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable; however, its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. This presentation may not be construed as investment advice and does not give investment recommendations. Any opinion included in this report constitutes our judgment as of the date of this report and are subject to change without notice. The views expressed are those of the author as of the date noted, are subject to change based on market and other various conditions. Material discussed is meant to provide general information and it is not to be construed as specific investment, tax or legal advice. Keep in mind that current and historical facts may not be indicative of future results. Certain risks exist with any type of investment and should be considered carefully before making any investment decisions. Keep in mind that current and historical facts may not be indicative of future results. The information provided is for educational purposes only and not intended to provide any investment, tax or legal advice. Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website.

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