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5 tips to help with your student loan payments

Celine Pastore, with SimplePath Retirement in Palm Harbor, offers tips to help you with your debt before the student loan moratorium ends on January 31.

TAMPA, Fla. — Federal Student loan payments during the pandemic were either suspended or had zero-percent interest rates, and unless the moratorium is extended again that relief could end January 31st.

Celine Pastore, with SimplePath Retirement in Palm Harbor, has some advice for those with student loans to help you before that deadline.

First, she says, stay on top of your debt. Government student loans are tax deductible, so think about paying off other debts with high interest rates, before tackling your student loans. Pastore says, "the bottom line is you want to know what you owe and get a strategy to get that debt paid off."

Second, use that stimulus money to help pay off your debt. If you're a student and your parents do not claim you as a dependent, you may qualify for stimulus money when you file your taxes. Whether you’re a current student or not, Pastore's advice is to pay that stimulus money directly to your student debt if possible. “Don’t use that $600 to go out on a trip and do something fun when it's safe to do so. You want to make sure you use that to pay off and reduce your debt."

The third tip is asking your boss for help. Through the latest stimulus package, lawmakers have allowed employers to contribute up to $5,250 tax-free, each year towards an employees' student loan debt. Pastore says that has been extended until the end of 2025, so “If you have an employer, I would have a conversation with them and say, what can we do to take advantage of this situation."

Fourth, Pastore says check in with your student loan lender. Especially if you’ve had a change in income, go to your student loan office and see if you qualify for more from FAFSA. Or she says, try to renegotiate, “especially if you're going to be behind or having issues in making those payments, communication is key. [Lenders] don't want to be ghosted, they want to communicate with you, and they are willing to work with you. They want to make sure they get their payment at the end of the day, and you don't want to affect your credit score.”

Finally, Pastore says watch out for scammers if you are looking to refinance your student loans. She says there are companies that charge big fees and get large commissions to refinance your loans, “so do your homework…make sure that they're a reputable firm and if you're unsure, reach out to your student aid department, or reach out to your financial institution. They know who the reputable companies are that they are open to working with.”

For resources on creating a debt payment strategy, you can go to the SimplePath website https://www.simplepathretirement.com/resource-center. You can also go to https://studentaid.gov/ to check out the online loan simulator, to help you better understand your federal student loan payments.

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