In tough economic times money can be tight, especially for new college grads that have yet to find a full time job. Unfortunately, just because you do not have a job, or an adequate amount of money coming in, doesn’t mean your student loan payments will just go away. With this being said, there may be some options to help you in reducing the amount of interest you must pay on your student loans, every little bit helps.
Some student loan lenders offer reduced interest rates if you repay your loan using automatic withdraw, allowing your bank to automatically deduct your monthly student loan payments from your checking or savings account. Some lenders will also give borrowers a reduced interest rate for making a certain number of consecutive on time monthly payments. For the FFEL Program, you should contact your lender to find out about these options. For the Direct Loan Program, call 1-800-848-0979 or visit the website at www.dl.ed.gov
There are also tax incentives for certain higher education expenses, including a deduction for student loan interest for certain borrowers. The tax benefit applies to federal student loans and private student loans taken out to pay for post secondary education costs. The maximum deduction is $2,500 a year.
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