Often, new business owners make little or no money for themselves while they’re working to get their venture off the ground, said Mark Kantrowitz, publisher of SavingForCollege.com. Therefore, they should see if they qualify for a deferment or forbearance, temporary postponements of their student loan payments. (Keep in mind, this might result in your debt growing due to interest accruing.)
“Entrepreneurs should also consider income-driven repayment plans, which base the monthly payment on your income, as opposed to the amount you owe,” Kantrowitz said.
To raise money for your business, Kantrowitz recommended using crowdfunding platforms such as Kickstarter, Indiegogo or GoFundMe. You might also consider asking relatives for help, or pursuing angel investors or business accelerators, he added.
People who want to start a business should “live like a founder,” said Noam Wasserman, the author of Life is a Startup. Find the discipline, he said, to keep your expenses low, save money and pay down your debt. He said one of his students lived on a friend’s couch instead of renting an apartment to pay off her student debt.
Once your business is taking off, be sure to make at least the minimum payment every month on your student loans to avoid penalties and to protect your credit score, said Kimberly Palmer, personal finance expert at NerdWallet.
New business making life hectic? “You can set up the payment as an automatic draft from your bank account so you don’t have to worry about missing it by mistake,” Palmer said.
Nerdwallet and the Small Business Administration also have tips on how to start a business with student debt.
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