October 18, 2018 | Article

Student loans are hard to shake; however, there’s obviously importance in investing in an education. That education usually comes at a price. A recent study showed the 2014 undergraduate class has an average of $33,000 in student loan debt.¹ Those who have completed a professional degree typically have an outstanding loan that’s even higher.

While the education may be worth it, and can open doors to future earning opportunities, having the outstanding debt may cause a hitch in your clients’ financial savings plan. Providing advice to help them pay off their debts early will allow them to have the opportunity to start saving for future financial goals sooner. With that being said, here are a few tips you can incorporate as you’re working with clients who have outstanding student loans:

1. Utilize windfalls to supplement the monthly payments
   As we mentioned in a prior article, there are times when your clients may receive a financial windfall. These windfalls could be anything from tax returns, bonuses at work, or small lottery winnings. If that’s the case – and they do have outstanding student loans – adding a little extra to their monthly payment can shave some time off the time needed to pay off those loans.
2. Consider refinancing as an option for your clients
   If they’re able to and eligible to refinance their loans, it could potentially provide them with a lower interest rate. Having a lower interest rate on the outstanding loans can lower monthly payments and accelerate loan payoff. If your client also has multiple outstanding loans, it could allow them to potentially consolidate it into a single payment.
3. Factor in their budget, financial goals, and calculate a minimum monthly payment
   Review their current budget and financial goals to see if there’s any wiggle room to pay over the required minimum loan payment. Having your clients make contributions over the minimum amount due will shorten the time they have outstanding student loans.

There are several ways in which you can help your clients pay off their student loans ahead of time. What will you incorporate to help them do so?

RoboWholesaler is a technology that was created to help financial advisors looking for ways to save time and enhance their productivity. With their time spent more efficiently, they’re able to focus on developing the interpersonal component of their client relationships and grow their businesses. The RoboWholesaler app is now available for free in the App Store and Google Play. It offers you a fast, easy way to review fund performance rankings, and get up-to-date fund fact sheets for top-performing funds and at-a-glance summaries of key fund information.

¹ “Congratulations to Class of 2014, Most Indebted Ever” Wall Street Journal. Phil Izzo.