#KemCents: Are Student Loans Draining Your Funds?

Student loans have now toppled over $1.2 trillion, according to the Consumer Financial Protection Bureau (CFPB), and what’s worse – student loans are only second to household mortgages and the number continues to grow.  As a result, more and more graduates are feeling the ill effects of student loans on their budgets.

So, if student loans are draining your budget, here are a few steps you can take to reduce your payments:

1. Don’t ignore it. 

The worst thing you can do is simply ignore your student loan debt.  Trust me, it is going nowhere!  As a matter of fact, the longer you ignore your student loan debt, the interest and late fees can really pile up!

If you are having trouble making your payment, contact your provider as soon as possible.  If you are in limbo concerning who actually services your student loans, have no fear; there is a site for that. Visit the National Student Loan Data System (NSLDS) website or call the Federal Student Aid Information Center at 800-433-3243 to determine your current student loan servicer. Next, it is time to get to work.

2. Adjust your payment plan. 

Keep in mind there are different payment programs to suit any budget.  While there is a laundry list of payment options, first consider the Pay As You Go or Income-Based Program. Both programs cap your payments to a certain percentage of your income, thus making your payments more affordable.  Keep in mind only certain loans may qualify.  For more information, visit

3. Have your loans forgiven.

And who knows? Maybe you can qualify for loan forgiveness.  The Department of Education offers two forgiveness programs to those who may qualify.  These programs include the Public Service Loan Forgiveness (PSLF) Program and Teacher Loan Forgiveness Program.

The PSLF program is available to those who work full-time for a tax-exempt or government organization.  Borrowers are required to make 120 qualified payments and subsequently their loans are forgiven.

If you currently teach at a qualified school that serves low-income individuals, you may also qualify through the Teacher Loan Forgiveness Program. In order to qualify, you must work for five consecutive and complete school years.  To determine whether you qualify for either program, visit for more information.

Remember: your choice, your future!

(Young man image via Shutterstock)

About Kemberley Washington

Kem Washington bio pic

Kemberley Washington, CPA is a professor at Dillard University and writes a finance blog at  She is the author of The Ten Commandments to a Financial Healing. Follow her on Twitter @kemwashcpa or hashtag #kemcents.