5 ways to pay off your student debt and start earning money
The cost of higher education has been soaring since the turn of the millennium. Already high, universities and colleges pushed the costs of schooling even higher and higher. Easily approved loans from the government allowed many people to go to college when a generation earlier couldn’t have afforded it.
Although this new paradigm offered many people the opportunity for schooling, the collective debt it generates has had a serious and detrimental impact on career and life-choices for the recipients. Staggering under a massive debt load, young people are getting out of college to find that available jobs don’t pay them enough to live and pay back their student loans.
Given the choice between living and paying back their debts, most people chose to live and worry about the future of their credit rating later, when they are making more money. Although understandable, this short-sighted view can irreparably harm your credit rating and make it more difficult to buy a home or a car, get a better job or get more education.
Finding a way to pay off your loans with the money you currently make and live comfortably should be your goal after graduating from college. You don’t want to do anything that will have harmful long-term effects but you don’t want to miss out on the joy of living in your early adulthood, either.
Unless you declare bankruptcy, which brings an entire new set of problems to your financial situation, you will be paying off your student loans for a long time. Setting up the best payment plan and ensuring the payments are made should be your first goal. Once you have that done, consider reducing or consolidating your loan payments to make it easier to do.
- Chose the best loan repayment plan. There are multiple plans to pay off student loans. These plans range from set payments for ten years to a long-term plan that runs up to 25 years with debt forgiveness waiting at the end. Know what you are getting into before you chose a plan that is right for you.
- See if your employer will pay off your student debt. It never hurts to ask. Paying off your student loans could be negotiated as part of your compensation package. By taking a lower salary, your company might be willing to pay off your loans.
- Auto-deduct loan payments from your check. Online payments that automatically come out of your check won’t make your debt get paid off quicker, but it will make it easier to pay every month. If you never see the money going to the student loans, you won’t miss it when it comes to paying bills and living.
- Pay off variable rate loans first. Currently, interest rates are low, some might say artificially low, and paying off loans with variable interest rates before those interest rates go back up will save you a great deal of money over the long term. A mere five to six percent increase can cause a great deal of financial hardships, even if your current payment plan is comfortable.
- Consolidate your student loans. Consolidation won’t lessen your debt, but it will make it easier to keep track and pay your student debt. One payment versus multiple bills is why it’s best to consolidate your loans.
College loans are the first taste many of us have with credit and debt in our lives. The way you solve the problems of paying back those loans while living a comfortable life can either give you the confidence to keep a firm grip on your credit or ruin your credit for a long time.
Get Regular Updates!
Like Our Debt Free Family? Sign up for our free email newsletter.