Sometimes conventional financial wisdom isn’t always the best advice for YOU. If you work full-time for a nonprofit 501c3 or government agency and have federal student loan debt, Public Service Loan Forgiveness should always be your first defense against overwhelming student loans. Choosing other options below before determining your eligibility and benefit could end up costing you money.
Often unheard of and under-utilized, federal student loan forgiveness programs are available. We specialize in determining if you can benefit from any of these programs and getting you started on the road to forgiveness. Check with Fiducius to see if you can benefit considering any of the other options below.
If student loan forgiveness is not beneficial for you, refinancing may an option. If eligible, refinancing can lower your interest rate or shorten the term of the loan. Keep in mind, doing this before checking into loan forgiveness could make you ineligible for any student loan forgiveness options moving forward.
Determine your monthly income, fixed expenses, savings, and don’t forget extra spending for things like avocado toast at weekend brunches. Once the budget is set and amounts are determined, it’s important to stick to it! Tell your friends and family too so they can help you. Keep your monthly discretionary spending to a minimum. Instant gratification is at an all-time high in our society, but keep in mind you’re working towards student loan freedom each and every month. Fiducius has a budgeting tool that will make it easy for you: Budget Planner
Setting up auto payments will force you to make monthly payments on time and never miss a payment. Loan servicers often incentivize you by offering a 0.25% interest rate deduction for being set-up on auto payments. Score! Keep in mind, if you are utilizing a student loan forgiveness program, we advise our clients not to use automatic payments through their loan servicer. It is a good idea to set up an automatic payment through your bank.
Contrary to popular belief, you can pay a servicer more than once per month. Set an auto payment for the dates of the month you get paid, i.e. the 1st and the 15th. If your monthly student loan payment is $300 per month, set an auto payment of $175 on the 1st and the 15th. If the money is being taken from your account the same day you get paid, the extra $25 per paycheck will likely not be missed.The extra $50/month will allow you to pay off your loans sooner and save accrued interest.
Again, this advice does not work for loan forgiveness participants. We advise our clients to only make the exact payment amount each month.
If being student loan debt-free is your main financial goal, then put a deadline on it to hold yourself accountable. Having an end goal will encourage you to plan ahead, make sacrifices, delay instant gratification, and most importantly focus on student loan freedom.
Shout your goal to the world, and have your friends and family hold you accountable too! Having a supportive crew will help you meet your deadline!
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