As a Xennial – a cross between Gen X and Gen Y (I swear it’s real) – I can thankfully say that student loans are in my rearview mirror. Gen Zs however, are just starting to graduate from college. Here are a few things current students and recent grads should know about their student loans…
You can get a tax break: If you’re out of school and have been repaying your student loans, you can claim up to $2,500 of the interest paid on your student loans each year.
You can swap your loan out for a new one: If you have a Federal loan with a Standard Repayment Plan, you may want to see about refinancing into a private student loan for a lower interest rate and a lower payment. If you’re interested, here’s a good resource to get started.
Quitting school doesn’t delete your debt: If you’re not completely sold on the idea of college, you may want to think twice about a student loan. Whether you graduate or not, there will be payments to be made. If you’re still trying to decide what you want to do with your life, maybe consider a gap year or a year at a community college.
There’s collateral to be collected: Just because you don’t have an object like a car or house that you’ve acquired with your loan, doesn’t mean your lender can’t collect if you don’t pay what you owe. With student loans, if you fail to pay, the lender has the ability to take money from your wages, social security, or even take away your tax refund.