Graduating from college is an amazing accomplishment filled with beautiful emotions. You have challenged yourself, worked diligently, and now have a degree to show off to the world. Unfortunately, this may have come with a high price tag. Now, instead of having homework and exams to worry about, you have student loan debt hanging over your head.
Just like with your studying, do not procrastinate when coming up with a plan to repay your loans. If you do, you will never be officially debt-free. Check out the following tips to help you get on the right track.
Pay off Interest While in School
Some of your loans may not require you not start paying anything until after you have graduated. However, the interest is still accruing. If you can financially begin paying some of the interest while you are studying, this will help immensely in the long run. Whether you set aside money weekly, biweekly, or monthly, having a set routine like this will be beneficial after you graduate and start making these payments.
Make More than the Minimum Payment
Just because the bottom line says you only have to pay this amount does not mean that is the best decision. If you only make the minimum payment each month, it will take you significantly longer to pay off the entire loan. It is very common to pay more than the minimum payment. Even doing so in small increments can be very helpful financially.
Additionally, making extra payments each month will chip away at the accruing interest. You can even set up auto-pay so that you do not even have to decide whether or not to make that extra payment.
Choose Loans Carefully
Reach out to your financial aid office before enrolling in a degree program. Ask them to explain all of the different types of loans that you qualify for (such as federal student loans vs. private), what interest rates they have, when you have to begin paying them back, and how much debt you will have when you graduate. Educating yourself will make you financially savvy and ensure that you are not surprised by the debt you are accumulating.
Jobs that Help Pay Back Student Loans
There are many jobs and companies that offer incentives to workers that include assistance programs to pay back student loans also known as student loan forgiveness. Teachers, volunteer organizations, doctors, nurses, and some government workers can enroll in loan forgiveness programs after a certain amount of time in the job. If you do your research and graduate in that field, try to find a job like this.
Choose a Payment Plan
Take the time and call the banks or companies that own your loans. Speak to an actual person and have them explain how to set up a payment plan; a payment plan will be created based on how much you can pay per month and will show you how long it will take you to pay off the loan. Be honest with yourself about your finances to set up a plan that you can stick to and not create more stress in your life. There is no point in making a payment plan if you do not commit to it.
Refinance Your Loans
Do your research on interest rates. Compare current interest rates with the interest rate on your loans. If the current rates are lower, it could be advantageous to refinance your loans and possibly combine loans. This will lead to lower payments and the ability to pay off the loans more quickly. However, be aware that if you refinance federal loans with a private lender, you will not be eligible for federal loan forgiveness programs or deferment programs.
Student loan debt can be overwhelming, but you do not have to let it be. You have done all of the hard work by studying and getting your degree; try not to let the stress of student debts overwhelm your life. Instead, sit down, take the time to understand your loans, and make a plan to pay them back.
Finally, do not accept a plan that will make it difficult for you to live your life from month to month just because you will be able to pay back the loans faster. You will most likely never stick to a plan like that, and then you will end up accumulating even more interest and lengthening the time it takes to become debt-free. Do your research about paying back student loans; it will be worth it.
