Here Are 8 Money Resolutions Every Person With Student Loans Should Make

Yaёl Bizouati-Kennedy

With the new year just around the corner, many Americans are starting to ponder about money resolutions. And for some of them, there is another factor to take into consideration. Indeed, the resumption of student loan payments, which started Oct. 1 after a three-year hiatus, is impacting many Americans’ wallets.

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With the average monthly student loan payment at $503, according to the Education Data Initiative, a staggering 37% of federal student loan borrowers said they have not saved money in anticipation of resuming their payments, a Credit Karma survey found.

Yet, experts said there are specific steps and resolutions these student loan borrowers should take to alleviate their financial burdens and start the year on a healthy financial footing.

Know What You Owe and How You Owe It

Dror Liebenthal, CEO and founder of Bold.org, said that with federal student loan payments resuming after a long pause, many borrowers may not know exactly which loan servicer holds their loans, how much they owe, and when their next payment is due.

“Find your loan details by visiting StudentAid.gov or calling the Federal Student Aid Information Center,” he said.

Peter C. Earle, senior economist, American Institute for Economic Research, echoed the sentiment, saying that the first is to understand their loan and its terms.

“I can’t tell you how many people I’ve met who, when I’ve asked them for some fairly straightforward information about their student loans, hadn’t the slightest idea,” said Earle. “A borrower needs to know whether their loan is federal or private, what the interest they’re paying is, what the remaining balance is, who the loan servicer is, and what the basic repayment terms are.”

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Determine Your Effective Interest Rate vs. the Stated Interest Rate

Many borrowers believe you can only improve a loan’s interest rate by refinancing with a private bank.

However, federal student loans often have a lower effective interest rate once the aid from income-driven repayment, interest subsidies, and student loan forgiveness is factored in, said Zack Geist, founder and CEO of Student Loan Tutor.

Consult a Professional

Geist said that federal student loans are almost always mismanaged and there is a crucial need for more access to the proper information and support to manage student loans.

“Similar to how taxpayers seek guidance from trained and licensed tax professionals to ensure accurate tax filings and prevent overpayment, you should consult with a professional regarding your student loans,” added Geist.

Resolve To Learn To Create — and Actually Use — a Budget

Budgeting may sound like tired advice, but that’s only because it works, said consumer finance expert Andrew Housser, co-CEO and co-founder of Achieve.

“It is imperative for consumers dealing with student-loan debt to have a strong budget in place – one that covers each month for the next 12 months, and then projects out for the life of their loan(s),” said Housser.

Resolve To Deal With Any Other Debt You’re Carrying

In many cases, the resumption of student loan debt payments is what is pushing people already struggling with other expenses over the edge, said Housser. In turn, some people have found that a balance transfer or personal loan — at a significantly lower interest rate than their credit cards — have helped them consolidate and pay off their credit card debt, thereby freeing up cash to make student loan payments, he explained.

“Some people, though, who are really struggling to even make minimum payments on credit cards, may need to look at debt resolution (settlement), in which negotiation with credit card issuers can help reduce principal balances due,” he said. “Again, this would help people out of other debt so they could deal with the student loan payments.”

Resolve To Do Your Research To Evaluate Other Options You Might Have

According to Geist, many borrowers do not realize they qualify for income-driven repayment (IDR) and forgiveness options.

“Take the time to investigate your options so that you don’t pay more than needed on your student loans,” he added.

In addition, Housser said that teachers or those who work for government or not-for-profit organizations may qualify for loan forgiveness.  Indeed, the Public Service Loan Forgiveness (PSLF) program enables teachers, members of the military, nurses, and other public service workers to get debt relief under certain circumstances.

And as for the IDR plans, they are designed for people who can’t afford their current monthly payments and aim at creating monthly payment amounts that are affordable for the individual borrower.

Eligibility is based on income, loan balance and the type(s) of federal student loans that you currently have and Housser said that as these programs are complex,  it’s usually a good idea to check with your loan servicer, who can run the figures and help enroll you in the best plan.

Decrease Your Expenses and Tackle Debt

Jenny Groberg, CEO of BookSmarts Bookkeeping and Accounting, paid off $250,000 in student loans in two years. According to her, decreasing your expenses is key.

“Did you start increasing your expenses during the COVID pause on Student loans? How can you decrease expenses to get back to a “poor student” life? Find a consistent side hustle or additional income and funnel it toward the debt,” she said.

And in regards to debt, she recommended “breaking the enchilada into bite-sized pieces.”

“Do you have multiple loans? Start with the smallest. Always make measurable goals. By X date I will pay off X amount on this specific loan,” she said.

Ask Your Current or Prospective Employer If They Are Willing To Offer Student Loan Repayment Assistance

Patricia Roberts, chief operating officer at Gift of College, said that student loan borrowers should take a deep breath about the weight of the debt that’s upon them, and one way to do this is to ask employers for help.

“A growing number of employers are aware of the stress student loans are causing employees and are open to providing support,” said Roberts. “In fact, under the CARES Act through 1/1/2026 (unless further extended), employers can repay up to $5,250 per year in student loans per employee and the payments are not considered taxable income.”

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