Before you can figure out how to deal with your student loan debt, you need to understand what type of loans you have: federal or private.

Federal Student Loans

There’s over $1.6 trillion dollars of student loan debt in the US and the vast majority (over $1.5 trillion) is federal student loans.* Federal student loans are owned by the US Department of Education and come with a number of benefits that can be very helpful if you do not make an income sufficient to pay down your loans on the standard 10-year plan (which, who are we kidding, is most of us!). Income driven repayment plans (IDR plans), deferment, forbearance, and more time before default are all benefits that come along with the process of paying off federal student loans. And perhaps the most powerful benefit of all is the prospect of forgiveness. Federal student loans go by many names, though, so check your information on studentaid.gov to see which of your loans have these benefits because unfortunately, being a federal loan is not enough -- it has to be the right kind of federal loan.

Private Student Loans

Private student loans are owned by, you guessed it, private entities such as banks and other lenders. You'll need to check with your service provider (whoever sends you your student loan monthly bill) to confirm who owns your private loan and what benefits may be offered. If you still cannot tell, you can also check your credit report to see who owns your loans and then contact the creditor for more information -- you can get a free copy of your credit report at annualcreditreport.com. Benefits are lender-specific so make sure to check out their website and speak with their agents to see what relief programs are available if you need them. Private student loans are not eligible for the federal forgiveness programs, but they may have lower interest rates, especially now.

So what’s the plan?

Figuring out what to do about your student loans (both federal and private) and coming up with the best plan for you is one of the most popular services I provide my clients. It's not simple and it's not easy and you don't have to do it alone.

If you want to talk through your student loan debt situation, schedule a free 20-minute consult call with me.

*All data as of Dec. 2019 available at https://www.studentloanplanner.com/student-loan-debt-statistics-average-student-loan-debt/