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Money Q&A: Reducing Student Loans

Q.

I’m paying 1/3 of my income to student loans, which seems ridiculously high. Can I reduce them?

A.

It’s hard to feel fortunate about your higher level of education when you’re making giant loan payments. But regardless of how painful these paybacks may be, they’re certainly not optional. If you default on your payments, the government can garnish your wages. With Uncle Sam backing all student loans, taxpayer money is at stake. So, head to your lender and try lowering your payments by renegotiating the terms. Bring along proof of your paychecks and other expenses to illustrate your difficulty in carrying your end of the deal. Often, the lender will agree to lower the monthly payments. The only drawback is that lower payments will extend the life of the loan and, ultimately, the overall amount of interest you’ll pay.

-- The Nest Editors

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