How to Decrease a Student Loan

Reduce your student loans to ease the financial burden of repayment.

A student loan should never be considered free money, as it accrues interest as long as you have an unpaid balance. If you've applied and received a student loan only to find out you overestimated your need, it is highly important to decrease the total amount of the borrowed money to trim the total cost of the loan. Alternatively, if you've begun making payments on the student loan and the monthly fee is stretching you beyond your financial abilities, you can decrease monthly payments by refinancing your loan or setting up a temporary deferment agreement.

Instructions

1. Contact your student loan provider and request an adjustment to your loan disbursement. The less money you take out from your student loan, the less you'll have to pay back once interest builds up on top of the loan amount.

2. Request a deferment plan. A deferment plan is granted through your student loan provider if you are experiencing financial difficulty and temporarily stops the monthly payments with no interest accrual. A forbearance plan postpones payment but continues to charge interest while the loan is placed on hold.

3. Apply for an income-based repayment plan. Whereas student loan repayments are configured based on the amount of the loan, an income-based repayment plan adjusts your monthly fees based on your income level.

4. Apply for the Public Service Loan Forgiveness program. A job as a teacher or public service worker eliminates your loan when you make 120 consecutive payments to your student loan.

References

• U.S. Department of Education: Public Service Loan Forgiveness
• New York Times: How to Lower the Burden of Student Loans