Student loan debt is a significant problem facing countless Americans. According to Student Loan Hero, of those who attended college in 2018, some 69% did so by taking on some form of student loan debt. The average amount taken on in 2018 was $29,800. This number included by federal and private debt. Parents of students also took out loans in order to send their kids to college. They borrowed around $35,600 in federal loans. As you can see by these stats, student loan debt is a big issue, for all ages. The following are several ways you can successfully eliminate or at least reduce the debt you have associated with student loans:
Determine How Much Debt You Are In
Before attempting to get out of student debt, you need to quantify the amount of debt you currently have. The easiest way to complete this step is to create a spreadsheet that outlines the interest rates, monthly balances, due dates and loan balances of all your student loans. Although it might not be a pleasant task to see the reality of your debt problem staring you in the face, it’s impossible to climb a mountain you can’t see, so you need to know the scope of the problem, before you can do something about the debt.
Determine if You Can Pay Your Debt
If after you see everything written out in black and white, you realize that you can’t actually keep your debt paid up while paying other expenses, there are a few ways you can address the problem. They are as follows:
- Cut expenses in order to allocate more money to student loans.
- Refinance or look into getting federal loan assistance to reduce the amount of your student loan payments. When refinancing, it might be advantageous to combine multiple student loans into one to get a lower overall payment.
No matter what, do not to stop paying your monthly payment. Defaulting on student loans can have significant financial consequences.
Create a Student Loan Payoff Plan
Work on the loan with the highest interest rate first, paying extra towards it each month. Of course, you still have to make sure you make at least the minimum payment on any other student loans you have. Don’t spend every dime you have, though, even if it means paying off debt. You should have at least some savings in case you lose a job or have a significant emergency repair come up. It does you no good to have your student debt paid off, if you have to go right back into debt if something like this should occur. Once you have a savings built up, tackle your loans one at a time in a steady manner, always moving forward each and every month. Don’t get discouraged, getting out of student loan debt does take some time and dedication.
Student debt can put a damper on your financial freedom and your professional success. However, there are ways to get out from under the oppression of student debt using the tips listed above. After using these strategies, you will begin to see the sun peaking through the clouds of financial debt once again.