Market Overview

American Financial Benefits Center: Student Loan Repayment is Important, but Should Not Come at Expense of Other Debt


American Financial Benefits Center: Student Loan Repayment is Important, but Should Not Come at Expense of Other Debt

PR Newswire

EMERYVILLE, Calif., April 25, 2018 /PRNewswire/ -- Despite advice to avoid debt, it has become ubiquitous in American households. Americans hold credit card debt and auto loans, but they also hold student loan debt. When borrowers hold multiple forms of debt, it becomes important to come up with a management plan that incorporates all of them. American Financial Benefits Center (AFBC), a document preparation company that helps its clients with federal repayment plan application and recertification paperwork, reminds borrowers that income-driven repayment plans can be useful in debt payoff plans if utilized strategically.

"It's somewhat counterproductive to get one form of debt under control if it comes at the expense of another," said Sara Molina, manager at AFBC. "When student loan repayment means racking up more credit card debt or missing car loan payments, something needs to change."

There are many ways to approach debt payoff plans, and individuals who need assistance with that should speak with a financial expert. However, every plan includes one key feature: all debt accounts must stay current by receiving monthly minimum payments. If any single expense gets in the way of that, such as high housing costs or student loan payments, individuals may be able to address that.

It is possible to reduce monthly expenses, but it does require certain lifestyle changes. Families can combine phone bills or switch to cheaper plans — same with internet or cable. They can also cook more meals at home rather than eating out. Car loans can be refinanced and credit card balances can be transferred for lower interest rates. Individuals should not lean on credit cards unless they can pay off the charges in the same month and earn rewards that help them in their goals.

Federal student loan borrowers can potentially reduce their monthly payments by enrolling in an income-driven repayment plan (IDR). Borrowers may be eligible for such plans if their income is low, payments are high or families are large. IDRs calculate payments based on income and family size and can reduce payments to as low as zero dollars in certain circumstances. Any funds freed up by a reduction in payments can be redirected to other bills or saving goals.

"Anytime you can lower your bills can help with paying others or padding a savings account, but you have to be careful not to spend that money carelessly as it might feel like extra money," said Molina. "At AFBC, we have helped our clients enroll in IDRs that have reduced their payments, and we hope they are using that to their financial advantage."

About American Financial Benefits Center

American Financial Benefits Center is a document preparation company that helps clients apply for federal student loan repayment plans that fit their personal financial and student loan situation. Through its strict customer service guidelines, the company strives for the highest levels of honesty and integrity.

Each AFBC telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).


To learn more about American Financial Benefits Center, please contact:

American Financial Benefits Center
1900 Powell Street #600
Emeryville, CA 94608

Related Links

AFBC home page

Cision View original content with multimedia:

SOURCE American Financial Benefits Center

View Comments and Join the Discussion!