The best way to pay off student loans depends on the kind of loans you have.

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Two readers face down their student loans with the help of two of our experts. See what they had to say:

Question: I have $130,000 in private student loans with 6.65 percent interest. The minimum monthly payment (interest only) is $715. I am currently paying $750. I also have $35,000 in federal student loans with 4.63 percent interest. The minimum monthly payment is $103. I’m paying $105. This loan will be forgiven after 10 years if I don’t make additional payments. I currently make $2,320 monthly and have $2,500 in savings. How should I attack this debt? – Meisha in North Carolina

Steve Rhode, the Get Out of Debt Guy, responds…

Actually, Meisha, I think you are doing a great job already.

The 10-year repayment plan is the fastest way out of federal student loan debt, and you will wind up paying the least amount of total interest. While there are other options that may lower your payment, you will wind up paying substantially more overall.

Why? Because no one is going to give you something for nothing. If you want a lower payment now, then the holder of that loan will want their money back later. That means extending the length of the overall loan – which means you’ll pay much more in interest since you’re adding years to the loan.

It’s not clear what the length of your private student loan is. Paying more than the minimum each month will go directly toward lowering your balance.

If I had a magic wand, I would help you to find a higher-income job to ease the pressure you may be feeling. You could then stash a bit into your emergency savings account and participate in any employer matching retirement savings plan.

Overall, it seems like you are at the minimum income point to service your student loan debt. The three primary ways to deal with debt are to increase your income, reduce expenses, or a combination of both.

I would bet you’ve already trimmed your expenses. But here is the inside scoop that most “experts” won’t tell you about reducing monthly payments on student loans or any kind of debt…

If you don’t lower the interest rate, then the only way to lower the monthly payment is to extend out the length of the loan. And as I’ve already said, that only makes the loan more expensive in the long run.

Solutions for student loan debt

Before you do anything, I’d recommend you read the report, How to Pay Off Student Loan Debt Fast. It will give you some more in-depth advice on the topics I raised here. You can also compare student loan debt solutions – because if you must extend your loan to get a lower monthly payment, you should try to get the best possible deal you can.

You may also want to explore private student loan settlement, which can be hit or miss and comes with several reservations and caveats. Click the link to see if it’s something worth exploring.

Finally, this situation is Exhibit A for why federal student loans are easier to renegotiate. The federal government has several programs that offer relief. I urge students to be careful about rushing into private student loans.

Crushed by student loan debt and worried you’ll never pay it off? There is help available.

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Question: My husband has almost $40,000 in student loan debt. Now it’s my turn to go back to school. My school is paid for — no loans necessary — but I’m tempted to get them anyway. If I take out new loans and pay off his loans, we can get an interest rate that is a little less than 1% lower but still keep all the benefits that student loans offer. Is this a good idea?  – Chanel in Utah

Andrew Pentis, personal finance expert and certified student loan counselor at Student Loan Hero, responds…

On the one hand, Chanel, I should applaud you for thinking about your family’s student loan repayment in the right way. Yes, your husband’s interest rate is a critical factor.

On the other, it’s rarely a good idea to take out new loans if you’re able to return to school debt-free.

Sure, borrowing for your education could help you repay what your husband borrowed for his. But let’s review some issues that make this strategy less than sound.

One logistical problem with this strategy

Few reputable lenders, including the Department of Education, will allow you to take out a student loan for your husband’s debt, rather than for your current cost of attendance.

  • Federal student loans: The school will apply your loan directly toward your outstanding balance comprising tuition, fees and room and board.
  • Private student loans: Many banks, credit unions and online companies certify your cost of attendance directly with your school. Once the loan is approved, they send the amount directly to its bursar’s office.

Put another way: The loan would never hit your account, at least not in its entirety, making it more difficult to throw the proceeds at your husband’s debt. (You might receive a leftover amount via a tuition refund check from your school, but that’s probably not what you had in mind.)

Be aware of the risks of repaying your husband’s debt

Even if you find a lender for your purposes (or if you have the cash on hand), it’s important to take a step back and consider the potential harm to your family’s finances.

If you and your husband keep your money separate, what amounts to a $40,000 gift could complicate your relationship. If you’re not confident in how your husband handles his personal finances, for example, resentment could build. Imagine how you’d feel if he started blowing his newfound cash flow on impulsive purchases.

If that scenario makes you queasy even in the slightest, consider that you can help your husband with his student loan repayment without ending it for him. Be there to offer emotional support. You could even guide his research for repayment options, which includes…

Student loan refinancing with a bank (not a spouse) could reduce your interest rate

After pondering your question, Chanel, I only caution you about the means, not the ends.

Essentially, you’re proposing to refinance your husband’s debt: Acting as a lender, you would take out a new loan and use the proceeds (or your savings) to pay off his debt.

Consider this alternative route: Return to school without needlessly borrowing. Separately, encourage your husband to investigate student loan refinancing with an actual bank, credit union or online company. This way, you minimize your risk — and your husband could lower his interest rate.

Just keep in mind that if your husband’s loans were borrowed from the Department of Education, refinancing would lose him access to government-exclusive protections like income-driven repayment or federal loan forgiveness programs.

On the plus side, refinancing could potentially reduce your husband’s interest rate by significantly more than 1.00% — but only if he or a cosigner has good credit. And if your husband’s credit doesn’t make the grade, he could take the time to improve it.

Of course, you could still fly in to save the day if you desire, by becoming his cosigner.

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About the Author’s writers are journalists, personal finance experts, and certified credit counselors. Their advice about money – how to make it, how to save it, and how to spend it – is based on, collectively, a century of personal finance experience. They’ve been featured in media outlets ranging from The New York Times to USA Today, from Forbes to FOX News, and from MSN to CBS.

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