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Optimizing Your Student Debt

4 Mar

Optimizing Your Student Debt(This is a post by Kaitlin Butler of CommonBond. I’ve recently looked for ways to optimize the student loan debt I have and she graciously offered some thoughts. I like the idea of maximizing the return on education investment she mentions below. Please leave your feedback in the comments. ~Mike)

Optimizing Your Student Debt

By Kaitlin Butler, CommonBond

There’s no “one size fits all” repayment strategy for the millions of Americans tackling student debt. Like nearly everything else in personal finance, it’s up to you to identify the best way to optimize your debt based on your financial goals and needs, and we’re here to help. Here’s what you need to know to take control of your student loans and maximize the return on the investment you made in your education, starting today.

The government offers more repayment plans; private lenders offer more savings.

Federal student loans come with a robust set of repayment options. The federal government offers repayment plans that private lenders can’t offer, including Income-Based Repayment and even Public Service Loan Forgiveness. (See the full list of options here.) However, these repayment plans don’t make sense for all borrowers. If you’re not in the public sector or you’re a high earner, you may not be able to take advantage of many of these options. If that’s the case, consider student loan refinancing, which will help you get a lower interest rate that will help you start saving quickly.

Refinancing gives you a second chance at picking your ideal student loan.

When you refinance, you trade out your old student loan for a new loan, giving you a second chance to customize your debt repayment plan. Besides applying for a lower interest rate alone, you can also choose a new loan type – fixed, variable, or hybrid – and loan term, typically from 5 to 20 years. That means that you can choose a loan type tailored to your own risk tolerance and long- and medium-term goals. (This blog post helps you find the right student loan for your personal situation, and there are no fees when you refinance through CommonBond.)

Reamortizing helps you pay off your loans faster and lowers your monthly payment.

If you save up a lump sum payment – like an annual bonus – that you plan to put towards your debt, make it go the extra mile with reamortization. This is when you make a significant extra payment and then reset your monthly loan payment schedule based on that big drop in your balance. To take advantage of this, ask your lender if you can reamortize (and if there’s a limit to how many times you can do so on one loan). When you reamortize you’ll reduce your loan balance and have lower monthly payments each month based on this new balance.

One final tip for anyone with loans? Make sure you’re signed up for autopay, also known as ACH, where your loan payments are made automatically out of your checking account. Lenders will often offer you a 0.25% interest rate discount just for signing up, and you can rest easy, knowing you’ll never miss a payment.

Kaitlin is Content Manager at CommonBond, a student lending platform that provides a better student loan experience through lower rates, exceptional customer service, and technology. Her articles have appeared on Lifehacker, the Huffington Post, Yahoo!Finance, and more. 

What Is a Persistent Optimizer?

15 Oct

What Is a Persistent Optimizer?

Once I get a big question in my head, it doesn’t leave. I will drive in to work thinking about insights and answers, spend all day working on solutions, drive home thinking, and then spend my most productive evening hours working on solutions. I will read voraciously the best material I can find about the issue. I will find the experts on the issue, talk to them, and read what they have to say. I will start to zoom in on the large themes and connections I see and develop my own unique response to the question or problem at hand. Though intense, this is fun for me! Finding big answers to big questions is where I gain the most energy.

Persistent Optimization – A Story

In 2007, six months into my current job, I saw that our manual CRM and registration system was not adequate for the future. I saw the trend that people were going to increasingly register and purchase goods and services online. I spent an extra 100 hours outside of my normal work hours in the month of January 2007 analyzing our customer and staff needs, researching potential options, talking to experts, and eventually designing and developing a custom registration and CRM application, from scratch. This was a big and complex problem that was quite fun to solve. We went from 0% online registration to 70% in just one year. We increased our attendance over 30% in the next five years. I estimate that we saved 4-8% in personnel costs, and we drove our mailing costs down to $0 through the use of automated emails and CRM communication functions.

My Strengths

Deep understanding of how to bring value to an organization

I seek out root causes and hate to see surface solutions stall the discovery of root change. I also love data because it gives one important piece of the puzzle when determining whether or not some solution is successful. Data helps you focus on the right things. I know that value is best-measured with supporting data. I bring the highest value to any work because I revel in measuring the details. I design and implement human performance solutions and systems that solve root issues.

Focus on human performance and solutions

I pursued and completed graduate studies in leadership not to simply lead but to discover ways to allow people to perform at their highest levels. I discovered early on in my teaching career that the social and emotional  dimensions of people’s lives are just as important as the cognitive and pyschomotor components. I work to bring good change to people and organizations.

Instinctive ability to work at the highest level

I also love to learn myself and pursue topics of interest as deeply as possible. I am well read across diverse disciplines and am able to walk into any given organization and discern issues and areas of opportunity very quickly, by both observing processes in motion and by talking with leaders, workers, and customers. People want to work with me because they know I am trustworthy and support their success.

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