Far too often, student loan borrowers sit in higher interest rate student loans with accrued interest balances.  In this scenario, the majority of their payments are applied towards interest and not to principal.  

In the scenario the borrower is making low payments (typically associated with income driven plans), their balances might even be increasing with time.  

If they are counting on student loan forgiveness, it is worthwhile to check out the approval statistics on the public sector program so far – https://studentaid.gov/data-center/student/loan-forgiveness/pslf-data .

If you find your loan balance growing each month, here are a couple of our tips for decreasing your interest rates:

• Refinancing with a private lender
  • If you have good credit and a steady income, a private loan may offer a lower interest rate over a more advantageous term.

• Taking advantage of lender-specific “loyalty” discounts
  • More often found with private loans, the lenders may offer extra discounts for good payment history or holding a certain balance in one of their savings accounts.

• Enrolling in automatic payments
  • Most loan servicers, federal loan servicers included, offer a 0.25% discount on your rate if you enroll in automatic payments.

While the short-term discount may appear small in value, the long-term benefits are immense.  The longer you wait, the less you will save.