Nearly 45 million Americans have some kind of student loan debt, and the system for paying back those loans can be confusing. That means it’s all too easy to make a mistake that costs you thousands of dollars.
One of the biggest, and potentially most expensive, issues for borrowers once they’ve started to repay their loans is that many assume they’re in the right type of repayment plan. But that may not be the case, says Elaine Griffin Rubin, senior contributor at financial aid site Edvisors.
Lots of people get stuck in a routine when paying down student loans, she says. Instead, every time you get a raise or a bonus or some sort of boost in income, make it a priority to ensure that you’re paying down your loans in the way that makes most financial sense for you.
Adam Minsky, a lawyer specializing in student loan law, agrees and suggests you “reevaluate the repayment plan at least every couple of years or so.” If you’re on an income-driven plan, for example, your financial situation two or three years from now may be different. You may have gotten married or divorced, or have bought a house, he says: “Circumstances change.”