Proven strategies to handle student loan debt

Nearly two-thirds of young who graduated from college this year will carry an average student loan balance of $30,000 according to some estimates. This may burden the young and hamper saving to buy a home and may push them onto more credit card debt on top of student loan balances.

Some student loan repayments are based on earnings. The Pay As You Earn program is based on 10 percent of the discretionary income and adjusts according to the income. This kind of repayment may require meeting certain criteria to qualify. One drawback of this kind of payment plans is that it may extend the repayment time but you will be burden with additional interest payments. Compare the benefits before you decide to sign up for this kind of repayment plan or to use the traditional 10-year repayment plan.

Look for certain professions that may help to forgiven certain portion of your student loan debt. Teachers and other government employees including Federal, state and local may qualify for the Public Service Loan Forgiveness Program after certain number of years of service. Also, don’t forget to take tax advantages by deducting up to $2,500 of student loan interest paid. Check with the IRS for income limitations.