Many young adults — hello, millennials! — are buried under a mountain of student loan debt. Lots of their parents took out loans for them too.

1. 5/4/2018 Student Loan Debt: 8 Tips For Millennials | Stock News & Stock Market Analysis - IBD
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PAUL KATZEFF 3/16/2018
PERSONAL FINANCE
8 Tips For Millennials Tackling Student-Loan
Debt
M any young adults — hello, millennials! — are buried under a mountain of
student loan debt. Lots of their parents took out loans for them too. More than 45
million borrowers are lugging around a combined $1.45 trillion in student loan debt
that they have not paid back yet, according to LendEDU.com, a marketplace for private
student loans and student-loan re nancing and consolidation. Nearly 7 million federal-
loan borrowers alone are in default on a total of $113.5 billion in student loans. And
student loan debt is the second-largest pile of debt in the U.S., trailing only mortgages.

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If you are a graduate or proud grad's parent who wants to get rid of student-loan debt,
how do you start? The stakes are high, especially for millennials. More than 34% of
borrowers blame their delay in starting a family on their student debt burden. And
more than 73% say it's the reason they have not started to save for retirement.
Student Loan Tips
Coping with that debt requires a combination of common sense and an ability to
ignore debt myths, nancial advisors say. Here are eight tips for attacking your student
loan debt. The rst three concern your broad strategy for tackling student loan debt.
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 Whittle it down. One way to do that is by paying off the loan that's easiest to settle,
if you have more than one. "See which one is your smallest balance," said David Hays,
president of Comprehensive Financial Consultants, in Bloomington, Ind. "Pay off that
smallest one so you can notch a win and feel like you're making headway." If it would
help you pay off that smallest one, consider paying just the minimal required on your
other student loans or even seeking a deferral if you're eligible, Hays says.
 Do the math. A second way to whittle down your debt is by getting rid of the
costliest loan rst. Private-lender rates on loans can top 15%, says Nate Matherson,
CEO of LendEDU, with government loans costing as much as 7%. "Paying down debt
that costs you 7.2% is better than many investments, if you can't earn that much or
more on the investment," Matherson added.
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It's a question of what the best way is to use your income or assets. It makes more
sense to get rid of a, say, 7% loan than continuing to pay the loan while using your
money to make an investment that earns only, say, 5%, says Andrei Cherny, CEO of
Aspiration, a nancial advisory rm that lets customers set their own fees.
If you have loans from both private lenders and the government, odds are that your
private loans carry higher interest rates. "Pay those off rst," Matherson said.
Can Your Loans Be Dismissed?
 Beware of easy- x myths. A small percentage of student-loan borrowers are
eligible to have their loans dismissed. To qualify, you typically must work for a
government organization or tax-exempt 501(c)(3) charity. But don't count on this
solution.
"Only a very small percentage of people qualify for student-loan forgiveness,"
Matherson said. "You see many ads, but the vast majority are just scams. We did a
study earlier this year and found that about 50% of borrowers think they qualify for
forgiveness. It's just not true. It's only in the low single gures."
You can learn more about loan forgiveness at this U.S. Department of Education site.
Concrete Steps
Once you've decided which loan you're going to pay off rst, take certain steps to make
your payment process easier and less burdensome. These ve steps spell out tactics
for how to proceed.
 Check your workplace bene ts. See if your employer offers student-loan
repayment bene ts. Some do, Matherson says. If this option is available, why not let
your employer help you pay back your loans?
 Consider setting up an automatic payment program. "Student loan servicers
almost always provide a 0.25% discount for auto-pay, which can really add up over the
life of a loan," Matherson said. "Plus, by using auto-pay, borrowers don't need to worry

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about making on-time payments each month." Late payments can hurt your credit
score and cost you extra in fees, he says.
Auto-pay has additional bene ts. "If you can't see the money, you won't miss it as
much," said Doug Amis, president of Cardinal Retirement Planning, in Cary, N.C.
Affordable Repayments
 Be realistic. Make sure your repayment ts your budget. "(The) fundamentals need
to be there to make sure you can afford your payment before you set up the plan,"
Amis said. "Mistakes can result in overdraft fees and budget crunches."
Amis recommends starting with a small amount that you know you can afford, then
ratcheting it up over time as the maximum you can afford becomes more clear or as
your income rises.
Some automatic payment programs work by transferring from your bank account to
the loan-service provider's account, like any online bill-payment program.
 Keep a tight leash on the process. Amis recommends that you use your own bank or
credit union to set up an online bill pay. "I prefer having the money sent from my own
bank instead of authorizing a lender to debit my account, and recommend the same
(for other people)," he said.
 Don't overlook re nancing. "You can use the savings to pay down your loan faster
or to pay for other things," said Matherson, whose website is one of many that lists
re nancers and their interest rates.
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