I’m sure that many who read this will tell me this post is a waste of time because the government is going to pay off all student debt. Thinking realistically, I’ll just say, “I don’t think so.”

Even if congress finally goes off the deep end and incurs another $1.5 trillion in debt to wipe out the Federal student loans, there are still many non-Federal student loans out there that will need to be paid off. Frankly, I don’t think anyone realistically expects the government to pay off all that debt. Most of the proposals on the table right now aren’t saying that. Best case for student borrowers? You can expect to still have debt to pay. So, what should you avoid doing in paying that debt off?

Mark Kantrowitz in Bottom Line Personal suggests a few things. The first is not to assume the government income-based plans are the best plans. There are some choices between the plans, and the alternatives should be examined. And be careful. Some of the rules of these plans, such as a new spouse’s income being included in the income-based calculations, could trigger a sharp increase in your payments. One more hint is that if your student loan balance is less than your annual income, skip the income-based plans completely.

The second mistake that is indicated in the article is consolidation just to make your life less complicated. The article talks about losing the opportunity to pay off some of the loans first instead of a huge lump of homogenized debt. There are ways to pay off your debt more quickly if you keep the separate loans. See the debt repayment plan in my “Say No! to College Debt” book.

The third mistake is not allowing the payments to be made automatically. Many lenders will lower the interest rates by a bit if you’ll allow auto-debit. If there is a problem with the program, you can still cancel the auto-debit at any time.

The fourth mistake listed in the article is to not pay off the highest interest debt first. I’ll again point you to my book, where it discusses this. I disagree with Mr. Kantrowitz, and the reasons are in the debt repayment plan in my book.

The next mistake is to not tell the lenders how you want any extra payments applied. I would add that you should look at your statements when you make extra payments and check to be sure your lender posted the extra payment correctly. This is important and extra payments are really the only way to get past your debt.

The final suggestion is to not skip employer-matched contributions to retirement plans to make payments on your debt. I tend to agree with this, although if things are really tight, you may just have to skip retirement savings for a while. If you can still make your retirement contributions, go for it. But get those loans paid down, as well.

Thanks for reading. Oh, and my book is available at https://saynotocollegedebt.com/buy-the-book/.

Source: Bottom Line Personal, January 1, 2017, pp. 11-12