Anytime you have a change in employment status, a student loan checkup is a good idea. Changing employers may open up new doors for student loan forgiveness, and your new company might even help pay off your debt.

Whether your income is going up or down, there are potential avenues for savings.

Income-Driven Repayment (IDR) Plans and a New Salary

A new salary obviously means changes to your Income-Driven Repayment (IDR) plan. If your salary is going up, you will want to delay the IDR changes as much as possible. If you are taking a pay cut, you will want the IDR payments to reflect the new position ASAP.

Loan servicers do not require a new income certification when a borrower changes jobs. However, borrowers may immediately apply to have their income recalculated if their income drops. Those taking lower-paying positions should complete a request for a new calculation of payments.

Those earning more money may be able to delay the new salary impacting payments. When you next re-certify, use your most recent tax return instead of a pay stub from the new job. If your recertification deadline is around the same time you file taxes, be sure to certify income first, and then file your latest tax return. Minor tweaks in timing could save hundreds of dollars per month for the next year.

Married borrowers should also reconsider their decision to file taxes jointly or separately.

Career Specific Student Loan Forgiveness and Public Service Loan Forgiveness (PSLF)

If Public Service Loan Forgiveness (PSLF) is even a tiny possibility, submitting employer certification forms (ECF) becomes essential. Borrowers should submit an ECF for their old job and their new job. The newly designed Department of Education PSLF Help Tool will provide borrowers with the necessary paperwork to complete.

If there is even a slight chance that an employer is eligible for PSLF, submitting an ECF is critical. After you leave a job, employer certifications get more difficult as time passes. Proving eligible employment long after you have exited the job can be difficult. Avoid this challenge by completing the ECF as you leave. Once the old employer has been certified, no additional contact with that employer will be necessary when you apply for PSLF years down the road.

Similarly, you will want to complete an ECF after your first month or two with your new employer. This step is crucial because it is the only way to ensure you are making progress towards PSLF. If the new employer isn’t eligible or if there is a problem with the loans or the repayment plan, an ECF will help identify these issues. If you wait several years before completing an ECF, it is possible that years of payments won’t count towards PSLF because of a minor issue that cannot be fixed after the fact.

Finally, keep in mind that PSLF isn’t the only forgiveness option. Many professions have job-specific forgiveness programs. If you are starting a new job, it is an excellent time to consider new student loan forgiveness opportunities that may be created.

Investigate Student Loan Benefits and Retirement Benefits

Many employers have student loan benefit programs. These programs can take various forms. One surprising aspect is that many people within your new organization may not be aware of the available student loan payment assistance. Thus, new employees should ask around to find out if such a program exists.

Additionally, retirement plan options may also impact student loan strategy. Borrowers who have the chance to benefit from a generous employer match will usually want to maximize this benefit. Borrowers may also be able to use retirement plan contributions to reduce monthly student loan payments or even increase the amount of debt forgiven.

In short, new jobs come with new perks. Student loan borrowers should consider these benefits carefully and explore changing their repayment strategy.

Leverage Your Income into Better Loans

Thus far, most of the discussion has centered around options for borrowers with federal student loans. However, a new job also means new opportunities for borrowers with private student loans.

If you are earning more money, your debt-to-income (DTI) ratio will be improved. In the eyes of student loan lenders, a better DTI means less risk. Put simply, more income means the borrower is more likely to repay their loans.

Borrowers with high-interest private student loans may be able to dramatically improve their interest rates by refinancing their loans.

At present, the following lenders are offering the best refinance rates:

Rank	Lender	Lowest Rate	Sherpa Review
T-1		4.86%	ELFI Review
T-1		4.86%*	Splash Financial Review
3		5.29%	Laurel Road Review

Finally, those with cosigners may be able to use their improved employment status to get their cosigner released from their loans.

The post Student Loan Moves When You Start a New Job appeared first on The Student Loan Sherpa.

Starting a new job is the perfect time to put together a plan to eliminate student debt. It is also a great time to figure out how to balance your student loan goals with other financial goals, such as retirement.

Make Sure You Know How Much You Owe

Waiting for student loan bills to show up in the mailbox is a terrible strategy. If one of your lenders is working from an old address, late fees and interest charges will pile up. Don’t let a collections agency be the one who notifies you about the status of one of your loans.

The good news is that it is reasonably easy to track down all of your student loans. For Federal loans, the Department of Education’s Student Loan Database will have all the information you need. On the database, you can find all of your loans, how much you owe, and the servicer responsible for collecting payments. The best place to track down private lender information is usually your credit report.

Tips to Getting Serious About Repayment

Smart student loan repayment requires a bit of effort to make sure you pay as little as possible. Nobody wants to spend decades paying student loan interest without ever eliminating the debt. A bit of research and financial planning will go a long way and potentially save thousands.

• Make a Budget – It sounds like a pointless exercise, especially if you try to be frugal already, but making a budget and sticking to it will ensure that your hard-earned dollars go as far as possible. Free resources like mint.com make the process relatively easy.
• Get Lower Payments on Your Student Loans – This one might sound counter-intuitive, but the fastest way to pay off your student loans requires getting the lowest monthly payment possible. The idea is to free up as much cash as possible each month so that you can pay off the highest interest rate loans first.
• Put Together a Real Strategy – Student loan strategy isn’t one size fits all. For many people, paying off the highest interest rate loans first makes the most sense. Others may choose first to attack their private loans. Meanwhile, they can address federal loans by qualifying for programs like Public Service Loan Forgiveness. If you have a cosigner, paying off the cosigned loans should get extra priority. The key is to make a plan. If you haphazardly pay extra money on random loans, you limit the effectiveness of your additional payments.
• Don’t Sleep On Extra Sources of Income – If you are getting a real paycheck, it might seem like a side-hustle is entirely unnecessary. However, if you can make a few extra bucks in addition to your regular job, you can make student debt disappear quickly. Better yet, make your second job something you enjoy. With some sweat and some luck, you might end up creating your dream job.

Employer Assistance in Student Loan Repayment

Many employers now assist employees with their student loan payments.

In some cases, these programs fly under the radar. They get created to attract employees, but not everyone within the company is aware of the program. A similar knowledge gap can likewise exist inside government agencies.

When you start a new job, be sure to ask around about any potential student loan programs. These programs take many different shapes, but they can be incredibly valuable.

A Special Note for Government and Non-Profit Employees: Working for the government or a non-profit is a great way to qualify for Public Service Loan Forgiveness. Unfortunately, it isn’t always obvious whether or not an employer is eligible. Don’t make the mistake of assuming that your job is – or isn’t – eligible. Spend a few minutes to learn for certain whether or not your employer is eligible for PSLF.

Don’t Forget About Retirement

If you are still paying off college, thinking about retirement can seem miles away. However, when you are young is the best time to be thinking about retirement. Money saved in your 20’s and 30’s can grow dramatically by the time you hit retirement age. The key is to strike a reasonable balance between the two crucial goals.

For example, if your employer offers 401(k) matching, take advantage of this program. At many employers, this can be a dollar for dollar matching. This means that your retirement investment doubles from day one. Try not to let student loans get in the way of this vital retirement building tool.

It’s also worth noting that money contributed to certain retirement accounts can lower your monthly payment on federal loans. For borrowers considering Public Service Loan Forgiveness, this can be a potent tool.

[Further Reading: Student Loans, Rent, and Retirement: How to Build Wealth and Fight Debt]

Use Your Income to Leverage Lower Payments

One of the biggest perks about having a “real job” salary is that your income can open the door for lower interest rates. Companies like Laurel Road and SoFi will pay off your existing high-interest student loans and replace them with new loans at hopefully much lower interest rates. The idea behind their business is that a college grad with a job is much less of a credit risk than a student with no degree and no job.

For borrowers with private loans, going this route is usually a no-brainer if it lowers interest rates. Federal loans get more complicated because it means giving up federal perks like income-driven repayment plans and student loan forgiveness.

Sadly, refinancing is a service that isn’t available to the people who desperately need it due to the credit score and income requirements. However, it can make the process substantially quicker and less expensive for people who can already afford their student loan payments.

Interest rates with the top lenders start at about 2%.

A First Job =’s Your First Real Chance to Eliminate Student Loans

The first real job after college is an exciting time. A steady paycheck opens the door to many new opportunities. One opportunity that should be utilized is the chance to get your student loans under control.

The post Dealing With Student Loans Once You Get Your First Real Job appeared first on The Student Loan Sherpa.