MONEY College

How College Costs Will Change in 2015

Although college costs are still increasing, they're increasing at a much lower rate than they have in recent years. Interest rates and repayment for federal loans have eased as well.

MONEY Student Loans

The Most Terrifying Stat About Student Loan Debt Isn’t What You Think

About half of student loan borrowers underestimate the amount of education debt they have.

It seems some college students need to work on their reading comprehension. Or their vocabulary. Whatever the problem is, some students aren’t grasping the concept of loans: 17% of first-year students who have federal student loans responded to a survey saying they had no student debt, according to a Brookings Institution report.

There are scores of stories and reports about the difficulty borrowers have repaying education debt, and that’s a serious issue, but the statistics about borrowers’ understanding of their loans and the cost of college are much more troubling.

The report from Brookings “Are College Students Borrowing Blindly?” cites some shocking figures, based on two data sets. The first, a survey conducted in spring 2014, included responses from first-time, full-time freshmen who applied for financial aid at their college, a “selective four-year public university in the northeastern U.S.” The second is the most recent result of the National Postsecondary Student Aid Study, a nationally representative analysis of first-year, full-time undergraduates with federal loan information available in the National Student Loan Data System.

The data reveals that students are generally clueless about the costs of higher education and how they’re paying for it. Nearly half of students underestimated their debt loads by at least $1,000, with 25% of students underestimating their debt by $5,000 or more.

I’m in Debt? Really?

There are a lot of reasons students may not fully understand their student loan debt: Students may be confused about the different kinds of loans (like federal or private), their parents may have taken charge of figuring out their education expenses, they’re simply not keeping track of their finances, or they really don’t understand the fact that borrowed money must be repaid. There’s not really a good excuse, considering the students had to sign paperwork saying they’ll repay the loan as agreed.

The gap between perceived and actual student debt is potentially more troubling than the growing student debt load itself. Failing to understand the costs of college and how you’re paying for it sets students up for an unpleasant reality check and regret if they can’t afford the debt they incurred along their chosen career path.

Student loans are rarely discharged in bankruptcy, and failing to repay them has serious consequences on the rest of your financial life. Missing loan payments is one of the worst things you can do to your credit, and if you default on student loans, you may face wage garnishment and calls from debt collectors.

Consequently, a low credit score can leave you unable to secure other forms of credit at affordable interest rates, not to mention rent an apartment or get a job. To see how student loans and your other financial behaviors affect your credit score, you can review two of your credit scores for free every 30 days on Credit.com.

Ideally, you’re well prepared to handle your student loans when you enter repayment, but if you think your loan payments will be unaffordable, you have a few options. If you have federal student loans, you may qualify for a variety of student loan repayment and forgiveness options. If you have private loans, you may be able to refinance. At the very least, you should reach out to your student loan servicer to see if there’s any way to avoid defaulting on your education debt.

More from Credit.com:

TIME

1 Number That Debunks Everything You Think You Know About College

College Student Graduation Debt Loans
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'Four-year degree' doesn't mean what it used to

There’s been plenty of ink and pixels spent parsing the problem of student loan debt: Why it’s so high, who to blame, how to stop it and so on. But a recent study sheds light on a huge contributor to the problem that goes largely overlooked: Public college graduation rates, even at big flagships schools, are jaw-droppingly low.

A study conducted by nonprofit group Complete College America tallied up both state-level and national data on graduation rates at two-year and four-year public colleges, and the results are sobering.

Only 5% of two-year students actually graduate in two years. The picture is hardly better for four-year institutions, especially when you consider that the cost of obtaining a bachelor’s degree is significantly higher. Only 36% of students at flagship public schools, and 19% of students at satellite and regional campuses, are able to walk out of the gates, diploma in hand, after four years.

“[We were] surprised at how pervasive the problem of time to degree has become at all public higher education institutions,” says Bruce Vandal, the group’s vice president. While two-year schools tend to attract more older, lower-income and first-generation students — all demographics more likely to be part-time students — Vandal says the issue goes far beyond that. “We did not expect flagship institutions and more selective public institutions to also have low on time graduation rates,” he says.

The numbers paint a clear picture showing that school administrators and policymakers, not to mention students, now consider a four-plus year timeframe to be the norm.

To some extent, Vandal says, this is a product of student error. Kids might not know what they want to major in when they first get to college and wind up taking a bunch of classes that don’t advance them towards the major they eventually choose. There also are a

But blaming a bunch of 17- and 18-year-olds for not being able to navigate the higher education system essentially on their own isn’t the answer. Vandal says there are plenty of things schools and states can do to make students better-informed consumers of the educational services they receive.

Some schools are experimenting with what Vandal calls a “guided pathways system:” Students have to pick a broad category — say, Health Sciences, for example — right away, then they get a year to narrow down their specific field of study.

“Another problem is that too few students enroll in the requisite 15 credits a semester that are necessary to graduate on time,” Vandal says. Students become eligible for “full time” financial aid while taking 12 credits a semester, and this mismatch adds up.

“For four-year students, registering for only 12 credits a term automatically puts them on the five-year plan,” Vandal says.

This has a big impact on students’ budgets and, ultimately, the debt loads they’ll carry with them for the first decade of their adult lives. “Once students’ time to degree exceeds four years, the costs to attend college increase and debt levels rise dramatically,” Vandal says. Every extra year of college for two-year degree seekers costs an average of $15,933 more. For four year degrees, it’s even higher: $22,826 for every extra year.

After four years, grants and scholarships may expire, and the savings of students and their families are more likely to be depleted, Vandal says, forcing them to rely more heavily on loans to complete their degrees.

“Reducing the time to degree and credits to degree for students will dramatically decrease student loan debt,” he says.

MONEY Student Loans

Help! I Owe $37K for My Kids’ College But I Make Only $28K a Year

knife cutting dollar bill
David Franklin

A student loan expert explains why there's hope for a parent saddled with student loan debt from two kids.

Brent Strine, 65, sent a blog comment to us describing what he thought was probably an impossible situation, and he despaired of ever being able to get out of debt. He wasn’t asking for help so much as describing a sense of hopelessness. Here’s what he told us:

I have 45k in parent loans from two children who cannot help me pay on them. Every time I defer them it costs over 1k added to the principal. I am 65, our (total household income) is 28k . . . (We have) no savings, no retirement plans or funds. Seems the only way out of debt is through the grave.

When we contacted him, he quickly noted that he feels grateful for his home and family, “and I am not in any way a ‘victim.’” He had deferred the loans when his wife was hospitalized after a serious car accident and when he had cancer surgery. He continues to work full time as a custodial supervisor, though he plans to retire in May 2015 because of some physical limitations. At that point, he wants to find part-time work. He was clearly worried about his debt, though.

He gave us the balances of his loans, down to the penny. And though he knew exactly how much he owes, he hadn’t a clue about how he could possibly repay it. He wondered if there’s some way he can get lower interest rates — he has several loans, $37K total, with rates of 8% or 8.5%. (The rest of the loans have much lower interest rates.)

We spoke with Joshua Cohen, “The Student Loan Lawyer,” on Strine’s behalf. The good news is Strine probably need not worry about unaffordable payments or high interest rates. Because he has federal Parent PLUS loans, he — and not his children — is on the hook for the debts, Cohen noted. And although Strine won’t be able to get lower interest rates, it won’t matter, said Cohen.

That’s because Strine’s $28K income should make him eligible for a repayment plan based on the borrower’s income. Cohen said a family of two with an adjusted gross income (reported on federal tax return) of $28K would have a monthly payment of $205. However, when we reached out to Strine, he told us his most recent tax return had an AGI well under $20K. That would result in a payment of just $71 per month, and possibly even less, Cohen said.

“The plan I’m talking about is called Income-Contingent Repayment (ICR) — the only income-based plan allowed for Parent PLUS loans,” Cohen wrote in an email. He had more good news for Strine: “It comes with 25-year forgiveness, which means if you live to 90, your loans will be forgiven. If you pass away before then, the loan goes with you — it will not attach to your estate.

“Bottom line, you can survive this loan,” Cohen said. “It would have been nice if the servicer gave you this information. After all, that’s what us taxpayers are paying for — to help borrowers stay out of default and continue paying.”

Student loans have an impact on your credit, for better or worse. Making arrangements with the servicer for payments you can afford can help you stay afloat financially, as well as help your credit standing — by making the payments on time and as agreed. You can see how your student loans are affecting your credit for free on Credit.com, where you can get two free scores updated monthly.

More from Credit.com

This article originally appeared on Credit.com.

TIME Money

These College Majors Have the Hardest Time Paying Off Student Loans

Student loans
Student loans Ian Jeffery—Getty Images

Some of them will surprise you

Most college students pick their major based on their talents and their interests, not on how easily that major can help them pay down their student loans. Maybe it’s time to rethink that.

A new study breaks down exactly how hard it is for former students to pay off their student loans based on what their chosen major. While some of the results are predictable, the research sheds new light on exactly how tough it can be for new grads in certain fields. The Brookings Institution’s Hamilton Project crunched the numbers on more than 80 different majors to determine how much graduates typically earn right out of school as well as a decade later, and how that affects their ability to pay off their student loans.

At the median, someone with a bachelor’s degree earns $27,000 right out of school, but some majors make considerably less, with a number earning under $20,000. “In the first year of the career, when earnings are at their lowest, graduates from several majors in the arts and humanities would need more than 20 percent of their earnings to service their loans,” the report says.

The list of majors who have to put the highest share of their income towards their loans in the first year after graduation is an eclectic one. “Graduates in drama and theater face payments of 24% of their earnings during the first year of repayment,” the study says. In addition, those with degrees in health and physical education, civilization, ethnic studies, composition, speech, fine arts and nutrition and fitness studies pay the highest percentage of their earnings towards student loan repayment in their first year out of school.

The vast majority — 66 of the 81 majors examined — will have to funnel more than 10% of their first-year earnings towards their student loans. Even grads with degrees in business and math initially have to spend 12% or more of their earnings servicing their debts.

The study also takes a look at how fast graduates’ income rises after graduation. Some of the majors with the lowest initial starting salaries see the fastest increase, largely because starting salaries are initially so low. Many graduates, even those who start out paying a high percentage of their income towards their debts, see that percentage fall quickly. “Earnings grow quickly for graduates of almost every major and especially so for those who start with the lowest earnings,” the study says. By the sixth year of a 10-year payment plan, only a handful of majors are paying more than 10% of their income in debt payments.

Those low incomes right after graduation are still cause for concern, though. “A key problem with the current college financing system is that debt payments are often fixed, while for many majors, earnings are low in the initial years following graduation,” the study’s authors point out. “This mismatch can lead to a substantial financial burden on young workers.”

Is there a solution? The study makes some recommendations around expanding the use of income-based repayment programs, but for now, students might want to consider majoring in computer science, nursing, operations and logistics, or any kind of engineering: People who come out of college with these majors have to dedicate the smallest percentage of their income upon graduation to their student loans.

MONEY Love and Money

The Most Important Talk You Need to Have Before Marriage

wedding rings tied to roll of $100 bills
Getty Images

A frank conversation about finances early on will prevent relationship land mines later on, says love and money expert Farnoosh Torabi.

It’s not exactly first-date material, but at some point early on couples ought to start talking about money.

Best if the first discussion happens before the relationship takes a turn for the serious—like moving in together, getting engaged or married, or cosigning a loan. You’d want to know if your steady’s trying to pay off a six-figure law school loan or hasn’t saved a dime towards retirement yet, right?

While we know it’s important, many of us shy away from asking our partners key questions related to savings, investments, debt and credit. More than 40% of couples surveyed by Country Financial recently said they didn’t discuss how they’d manage their money together ahead of tying the knot.

As a society, we’re not especially conditioned to speak intimately about our finances. One report found money to be a tougher topic for Americans to talk about than politics and religion. Plus, if you’re not particularly proud of your financial state, a no-holds-barred discussion may stir up anxiety, embarrassment and fear of rejection.

Here’s how to calmly—and, dare I say, pleasantly—enter this critical conversation into the record in the early stages of your relationship:

Set a Date

My now-husband and I had a money powwow about two years into dating.

Don’t get me wrong: By then, we’d fully observed each other’s spending behaviors and discussed goals (thankfully, with no red flags). But we’d yet to really share specific numbers.

With plans to move in together and cosign a lease just a few months down the road, we figured this was a natural and important time to get into the nitty-gritty.

If you and your mate haven’t come anywhere near this conversation yet, my recommendation is to schedule a time to talk so that your partner doesn’t feel blindsided and so that you can each do a little homework beforehand if need be.

One way to frame your request for a money summit: “I know it’s not the most exciting thing to talk about, but it would make me a lot more comfortable if we could go over our finances together since things are getting more serious. I’m not worried at all; I just think it’s helpful if we share the basics so that we’re both on the same page and can work toward common goals. And I want you to feel like you can ask me anything you want about my finances. I want to be an open book about this stuff because I’ve seen how it can unnecessarily complicate things in relationships.”

Then ask: “What do you think?”

Make an Even Exchange of Information…

To ease any potential tension, my future husband and I decided to meet at a familiar and fun setting: our favorite bar.

We ordered a round (one round only) of margaritas and proceeded to jot down the following on a piece of paper: annual income, bank balances, outstanding loans and credit card balances and approximate credit score.

Then we swapped papers, revealing our details at the same time.

This exercise gave us a simple, quick apples-to-apples comparison and helped us understand our relative strengths and weaknesses.

We discovered that while I had more retirement savings, he had a better credit score. (I was still dealing with the consequences of a late payment on my Banana Republic Card five years prior when I was younger and less vigilant. Sigh.)

You and your partner could try this tactic if you both are straight shooters. But if your sweetie could use some help coming out of his or her financial shell, you might need a softer approach.

…Or, Ease Gently into the Interrogation

Revealing a bit about yourself first may encourage your significant other to talk money.

“Share your feelings and see how he or she reacts,” says Barbara Stanny, author of Sacred Success: A Course in Financial Miracles.

For example, you could start by saying, “I really hate having credit card debt.” From there, you can talk about your personal experience and then ask for your partner’s take.

Or, try the following softball conversation starters which can help you get at hardball answers:

What you really want to ask: “How much do you have in savings?”
Start with: “Would you say you’re more of a saver or spender? Why?”

This helps you figure out habits and behavior, which can be just as telling as actual figures. “Most important, you want to know what are their spending and saving personality is like. For example, how impulsive are they?” says Kate Northrup, author of Money: A Love Story. You can follow up with a question like, “Are you trying to save up for anything major?” This approach can also help you figure out if you share similar goals.

What you really want to ask: “What’s your credit score?”
Start with: “When did you first open a credit card?”

Go down memory lane together to ease into your credit technicals. Talk about how you might have signed up for your first card in college just to score that free t-shirt. And admit a personal rookie misstep you might have made with said credit card.

Then gradually you can warm up to: “Have you ever looked up your credit score?”

If neither of you know, take a few minutes to get free estimates using mobile apps from Credit Karma, Credit Sesame or Credit.com.

What you really want to ask is: Do you have a lot of student loan debt?
Start with: How did you pay for college?

This is the question many dating couples probably want answered, as towering student loan debt is a sobering reality for many.

A conversation about how you afforded school—via scholarships, working and/or student loans—will help engage your partner. And along the way you may gain some insights into each other’s financial values or work ethic, too.

Once when you’ve gotten all these basics out of the way, treat yourselves to another margarita. Your first money talk out of the way! Now that’s a relationship milestone to be celebrated.

Farnoosh Torabi is a contributing editor at MONEY and the author of the book When She Makes More: 10 Rules for Breadwinning Women. More of her columns and videos for MONEY.com:

MONEY Student Loans

The Surprising Downside of Steering Clear of Student Loans

Headlines about daunting student loan burdens may leave you scared to borrow altogether. But a college degree is worth the investment, even if that means taking on some debt.

The next generation of college students has heard the message loud and clear about the perils of taking on too much student loan debt—so much so that many are unwilling to go into debt at all in order to attend college.

The drawback to this wariness is that for those who do not borrow, they are unlikely to get four-year degrees.

The vast majority of people aged 16-19 recognize the importance of a college degree, but most say they either want to avoid education debt entirely or to limit their borrowing to nominal amounts, according to a recent survey by Northeastern University of 1,000 teenagers nationwide.

About a quarter of those polled said they want to remain debt-free, while 45% felt they could afford to pay a maximum of $100 a month, which at current interest rates means borrowing no more than about $10,000.

That amount would not cover a single year at many public four-year colleges, even after financial aid is taken into account.

The problem with not borrowing is that most families do not have nearly enough saved to pay for college. About half of U.S. families are not saving for their children’s educations at all, according to a survey by Sallie Mae. Among those who are, the average amount saved is around $15,000. (To see if a school you’re interested in is worth borrowing for, see MONEY’s rankings of the Best College Values.)

Meanwhile, some commonly recommended ways to cut costs—such as starting at a community college or working your way through school—dramatically increase the chances of a student dropping out without a degree.

One recent study found a 17-percentage-point difference in bachelor’s degree completion between those who start at a four-year college and those who start at a two-year school intending to transfer.

Another study found that those who work 30 hours a week or less, excluding work study, were 140% more likely to graduate college within six years than those who worked more.

Now no one expects teenagers to be financially savvy. Many do not understand the difference between bad debt that can sink their finances and good debt that can help them get ahead. The trouble comes when teenagers make an all-or-nothing decision based on their ignorance.

That is true for those who will spend anything to get their degree and those who are so averse to debt they will borrow nothing.

The nuance that the debt-avoiding teens are missing is that those sob stories about unemployed or barely employed college graduates with six-figure student loan debt are very much the minority. (Still, see how you could end up with a six-figure debt for film degree here.)

Even though student loan debt is rising, just 7% of borrowers take out more than $50,000, according to the Brookings Institution’s Brown Center on Education Policy. Only 2% take more than $100,000.

The average debt at graduation for bachelor’s degree recipients is $33,000, said Mark Kantrowitz, author of Filing the FAFSA and publisher of Edvisors.com, a higher education resources site.

That amount may seem formidable, but for most graduates it is not.

“If total student loan debt at graduation is less than the annual starting salary, the borrower will be able to repay his or her student loans in ten years or less,” Kantrowitz says.

For most graduates, that’s the case. The average starting salary for new college graduates this year was $45,473, according to the National Association of Colleges and Employers, ranging from a low of $38,365 for humanities and social science majors to a high of $62,719 for engineers.

Even larger debts may not be cause for concern. About a quarter of the increase in student loan debt comes from rising levels of education—more people attending graduate and professional schools.

Advanced degrees typically confer higher incomes, according to Georgetown University’s Center on Education and the Workforce. Master’s degree holders can expect to earn $2.7 million over a lifetime while professional degree holders can expect $3.6 million.

That compares to the $2.3 million someone with a bachelor’s degree can expect to earn and the $1.3 million expected earnings for those with only a high school diploma.

Of course, not everyone needs or wants a four-year degree. The payoff for a two-year associate’s degree from a community college—an education mostly covered by that $10,000 in borrowing—can be considerable. The Georgetown researchers figured an associate’s degree-holder can expect to earn $1.7 million over a lifetime. What’s more, 28% of associate’s degree make more than the median earned by a four-year degree holder.

For most people, though, the investment in a four-year degree will pay off handsomely in terms of higher incomes and lower unemployment. An unreasonable fear of debt should not be the deciding factor between a good education and something less.

 

TIME Money

You’ll Never Guess College Students’ Biggest Regret

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Female student worrying about money Image Source—Getty Images/Image Source

It's not what you think

You might think that when people look back on their college years, their biggest regret would be not being more involved socially, choosing the wrong major or partying too much. In reality, the biggest regret college grads face is a much more grown-up one, and it’s one with repercussions that can follow them well into their adult years.

According to a study conducted by Citizens Financial Group, 77% of former college students age 40 and younger regret not doing a better job of planning how to manage their student loan debt.

Student loan debts have ballooned in recent years, even as the demand for higher education has boomed as more companies in nearly every industry require that job applicants have college degrees. Earlier this year, Federal Reserve Bank of New York data showed that Americans collectively owe $1.1 trillion in student loan debt. By comparison, we owe $8.2 trillion in mortgage debt and $659 billion in credit card debt. Each indebted borrower owes nearly $30,000 upon graduation, and many of them are struggling. Citizen’s survey finds that current students carry roughly $25,000 of student debt, while their parents carry an average of $22,000.

Nearly a quarter of former students in Citizen’s survey say they can’t stay current on their debt payments, and almost two-thirds say they’re uncomfortable with their debt load. Almost half say they would have reconsidered going to college entirely if they knew how burdensome their debts would be years or even decades later.

Current students aren’t faring much better: Seven in 10 don’t think they’ll have enough financial acumen to do a good job managing their debt, and more than 80% say they wish they knew more about the long-term impact of carrying this debt — which will take nearly two decades to pay off for many borrowers, according to the survey responses of former students. What’s more, more than a third of former students don’t even have a guess when they’ll have those debts paid.

A lack of communication seems to be a big contributing factor to this situation: Families don’t talk about student loan debt or make a plan to tackle it in advance. Only 15% of former students and just under a quarter of today’s students report having detailed discussions with their parents about how to pay off those debts — 46% of former students say the topic never came up at all.

The heavy debt burden has some wondering if it’s even worth it. While almost 90% of current students think taking out loans to pay for school will be worth the investment, only about two-thirds of former students think so. And while nearly three-quarters of current students think college is necessary no matter what the cost, only 59% of former students feel the same way.

Vote Now: Who Should Be TIME’s Person of the Year?

MONEY road to wealth

Why This Married Couple Lives With Roommates

The Liebhards have $135,000 in student debt and counting. That's led them to an unusual living situation.

Samantha and Travis Liebhard married right after their college graduation in 2012, and quickly moved to Minneapolis so that Travis could start his graduate pharmacy program at the University of Minnesota—Twin Cities.

Travis has racked up $135,000 in student loans and expects to incur another $60,000 before graduation. So to save money, this September they moved into a four-bedroom apartment they share with two roommates — single guys who are classmates of Travis’s at pharmacy school.

Samantha complains about dishes in the sink and clothes left on the floor, but the four roommates — plus the two cats in the apartment — get along well. “It’s helping me prepare to have children one day,” she jokes.

To learn more about the Liebhards and their journey on the road to wealth, read Retirement Makeover: Just Starting Out and Overwhelmed by Debt.

MONEY Student Loans

How to Pay Off Student Loans Without Surviving on Ramen

graduate eating ramen on the floor
Datacraft/QxQ images—Alamy

Recent grads: You don't need to live off instant noodles or buy only the cheapest beer. What you really need is a plan.

For some federal student loan borrowers who graduated in May, the time has come: It’s the end of your loan repayment grace period.

If you’re about to start shelling out monthly loan payments, just started or are hoping to aggressively tackle your debt, there are a lot of things to do before you start transferring money.

1. Get a Grip on the Basics

Let’s start with the fundamentals of loan repayment: You owe a certain servicer a minimum amount of money at the same time every month. Make sure you know how all that works. You should have received notification from your student loan servicer, but if you’re not sure who you’re supposed to pay, you can access your federal loan information in the National Student Loan Data System. It’ll tell you who you owe. Private student loans won’t be found in that database, but will likely show up on your credit reports with information about the lender so you can contact them.

Make sure you understand exactly what you’re required to pay each month and your payment due date. Jodi Okun, founder of College Financial Aid Advisors and Discover Student Loans Brand Ambassador, recommends organizing your student loan information in a document and setting up calendar reminders for when the payments are due. Look into automatic payment options with your servicer, as well, but you’ll still want to make sure the payment goes through every month. Forgetting about it could accidentally lead you to miss a payment.

2. Figure Out What You Can Afford

As a new graduate, you may be dealing with more life expenses than you have in the past, or you might still be in search of a job you want. Paying your student loans needs to be a priority, because once you fall behind, it can be very difficult to catch up, and missing loan payments will seriously hurt your credit score. You can see how your student loan payments affect your credit score from month to month by getting two of your scores for free on Credit.com.

If you’re concerned about being able to afford your payments, look into student loan repayment options. Federal loan borrowers are often eligible for income-based repayment or loan forgiveness. The application process might take a few months, said John Collins, managing director for GL Advisor, a student loan debt consultancy. Servicers are dealing with a lot of repayment program applications this time of year, so it could take you 60 to 90 days to enroll, Collins said. In the meantime, make sure you can afford your payments.

3. Make a Plan

You may hate the idea of paying debt off over the course of a decade, racking up interest along the way, but before you decide to throw as much money as possible at your debt, consider your entire financial picture.

“What we’ll recommend to everybody is right out of school, limit your required payment as much as possible,” Collins said. “They need to have an emergency savings fund in case something happens. That should be a goal before you start paying down debt.”

Once you have enough socked away to cover three to six months of expenses, then you can consider upping your loan payments, though you’ll want to make sure you won’t incur penalties and your extra payment goes toward the principal loan balance.

Figure out if you want to consolidate or refinance your student loans and what it would take for you to qualify. There are a few companies offering competitive refinancing rates for private loan borrowers with qualifying credit histories, and that could save you a lot of money in the future.

Federal loan borrowers have some decent options for making payments affordable, and all it requires is a little planning. For example, when you’re gathering documents to prove your income level, make sure you’re providing the most accurate information — your earning situation may have changed drastically since you filed your taxes — so your loan repayment is accurate, Collins said.

“Ultimately I think borrowers have a great opportunity to reduce their debt payments through the federal loan repayment options,” Collins said. “A lot of people recommend eating only Ramen, and live in a studio apartment, and only buy toilet paper if necessary. You should never feel that pressure. Use the many tools that are out there, educate yourself on what they are, and if you need help, there are plenty of resources out there.”

More from Credit.com

This article originally appeared on Credit.com.

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