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Getting out from under student loans

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Q. I have been in forbearance with my loans on and off for 20 years. I am $74,000 in debt and it keeps rising with interest. I never worked full-time in my field of study – teaching – and I don’t see that happening now that I’m in my 60s. I do work as a sub. How do I get out from under this debt?
— Exhausted

A. We’re glad you want to get a handle on this debt.

You have to take action on the loans, but also take action with your overall finances.

First, see if you can lock in the debt, said Jody D’Agostini, a certified financial planner with AXA Advisors/The Falcon Financial Group in Morristown.

“You will need to call the institution(s) that you owe money to and let them know that you are unable to continue payments at this level,” she said.

Then you need to revisit your expenses and see what you can afford based on your income.

You should complete an expense sheet and see if there are any discretionary areas where you could cut back, she said. This will give you additional ability to pay.

Also look at your living arrangement to see if it’s truly affordable give your current income. If not, she said, look to move to a less expensive home.

Make sure that whatever number you decide you can afford to pay is one you will be able to sustain. Then it’s time to call the lenders and start negotiating.

“Try to lock the debt in so that it is not accruing additional interest. At least then your debt is quantified and not growing,” she said. “They might ask that you go on automatic monthly payments, but at least they will be payments you can afford.”

Another way out of the situation is to earn your way out.

“Perhaps explore tutoring for additional income since you are an educator,” D’Agostini said. “You might want to put out a resume to see if there are any other positions that you are qualified for that will provide you with either increased, or supplemental income.”

Finally, because you’re in your 60s, you’ll soon probably be able to collect Social Security income,

“You should consider postponing collecting your benefit for as long as possible up to age 70, as each year your potential benefit will rise by up to 8 percent,” she said. “Your full retirement age is likely 66 and you should consider waiting until then.”

Also, because you are still working, there could be a reduction in your Social Security benefit if you collect before then.

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This story was originally published on March 12, 2019.