Did you know that if you have student loans forgiven under the Public Service Loan Forgiveness the forgiven loan balance is tax free. However, if your student loans are forgiven under other types of income based repayment plans the forgiven balance is considered taxable income and you have to pay taxes on that balance in the tax year of forgiveness. If you are in one of these repayment plans you may want to start setting aside money now to cover the tax bill you will be faced with.
If you’re in high school or college, make yourself stand out from your peers by getting involved in the community. You can do volunteer work and join school/community organizations. This involvement will help you feel better as a person and will build you a great resume. It will also make you a more qualified candidate for many scholarships and will build your professional network.
Take out federal student loans before taking out private loans. Federal student loans usually offer lower fixed interest rates, less interest accrues on subsidized loans while you are in school, they offer the ability to access income-driven repayment options and depending on your career and type of repayment option you could also be eligible for Public Service Loan Forgiveness. Fed Loans also generally have a disability clause.
If you have student loans or expect to, create a spreadsheet to track these loans. It’s likely that every semester you will be taking out loans and it can be very easy to forget how many you took out, especially when they are through different loan providers. Things to include in your spreadsheet would be: what type of loan was taken out, who the loan provider is along with their contact information, when the loan was taken out, the amount the loan is for, what the grace period is, and what the interest rate is.
Are you thinking about a career in a public service field? If you are, be sure to check out Public Service Loan Forgiveness. Depending on the types of loans you have and what type of organization you plan on working for you may be eligible for Public Service Loan Forgiveness (PSLF). If you are eligible, be sure to set up your loan repayments with an eligible repayment plan.