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Individuals need to think carefully about the implications of taking out student loans before they sign on the dotted line. Many students have taken out these loans without thinking about how it will affect them in the future, and they have experienced financial difficulty as a result.

After all, student loan debt typically cannot be discharged – not even through bankruptcy in most cases. Before graduating, students should take some time to strategize how they will pay off their student loans without neglecting their other financial responsibilities.

Five tips to keep in mind while trying to create such a strategy include:

  1. Make a personal repayment plan.

payment planOnce individuals have used their grace periods, they will be charged according to a payment plan set up by the lender and chosen by the borrower. Typically, borrowers will have to make sacrifices to make these payments at first.

Over time, however, as individuals rise in their careers and make more money, they can begin to put more money toward loans. In these cases, it is important to make a personal repayment plan and stick to it.

Sometimes, it is tempting to allocate the additional amount in a given month to pay for something else, such as a vacation. However, making additional payments can significantly reduce the overall money spent over the life of the loans.

When making an additional payment, borrowers should send the lender written notice to apply it to principal. That way, the total interest accrued will be reduced. Those who have multiple loans should focus on paying down one at a time, starting with the loans that have the highest interest rates, which are typically private loans.

  1. Keep financial priorities in balance.

Paying off student loan debt quickly minimizes the amount of interest paid. However, individuals should not ignore their other financial goals.

Making more than the minimum payment toward student loans does not make sense if you do not have an emergency fund or if you have accrued significant credit card debt. Credit card debt typically carries much higher interest rates than student loans do.

Also, even in their 20s, people should make retirement savings a priority. Paying extra money toward student loans when you have no retirement savings will only hurt you in the long run. This is especially the case if you have access to employer match programs, which are essentially free money.

  1. Look into employee benefits.

Not long ago, the thought of employers paying off student debt was unheard of, but many companies are now doing just that. According to research, nine out of 10 job seekers would be swayed by a job that offered student loan repayment as part of the benefit package.

Furthermore, 80 percent of employees say they would stay with companies that offered such a benefit. Employers like Staples, Fidelity, and PwC now offer this benefit, and many more will likely join their ranks in the future.

People may also be eligible for federal forgiveness programs if they work in certain public service positions, such as healthcare and social work. For example, the Public Service Loan Forgiveness program eliminates federal student loan debt after 10 years of consistent payments for people in certain positions. Individuals should investigate any such programs associated with their jobs to reduce their personal burdens.

  1. Refinance student loans for more favorable terms.

financeNot everyone is able to refinance their loans since eligibility depends on debt-to-income ratio and credit score. However, those with a strong credit history can sometimes save a great deal of money by refinancing.

A number of banks and online lenders offer refinancing that can reduce interest rates by 50 percent or more. Before agreeing to a refinance, however, borrowers should always read the fine print.

Individuals should ensure that the lender is reputable and that there are no excessive fees associated with the new loan. Also, those who plan to go back to school at some point may lose their right to deferment. In addition, income-based repayment plans may become inaccessible should anything happen to income streams.

  1. Live significantly below your means while paying off debt.

People who are serious about repaying their student loans quickly often need to make some sacrifices. When looking for jobs, it is important to think about all expenses, including cost of living.

Jobs in Los Angeles, New York, and Chicago may come with high salaries, but are the jobs really worth it once cost of living is taken into consideration? Sometimes, living in a less expensive area for five or 10 years after graduation gives people the chance they need to eliminate debt so that they can live in areas with a higher cost of living down the road.

Borrowers should also avoid taking on additional debt while paying down their loans. For example, is it necessary to buy a new car now, or can a cheap used car work for the next few years so that additional money can be used to eliminate student loans? Paying down debt quickly may also involve taking less expensive vacations, canceling cable, and making other frugal decisions.