This shocked me, but I read an article that stated there are over than 44 million borrowers who owe more than $1.4 trillion in student loan debt! That amounts to over $31,800 per person, which is a lot of money! While you may not be able to pay off the entire amount quickly, the ball is in your court and there are several ways to ease your current debt burden. Below are some great tips and tricks to help you have a better financial life going forward.
As an update on my personal student debt burden, I am happy to report that my wife and I are on plan to pay off our student loans by the end of this year. We have taken a very aggressive approach where we allocated over 30% of our paychecks to paying off our student loans each month. Also, any incremental income we get goes towards paying down our student loans. It has taken us over 4 years to do it, and we will be so happy when we will be debt free!
- Set a strict monthly amount or %: Always pay yourself first. Once you know how much you can allocate to paying off your debt, stick to this plan every month. Set up your payments at the beginning of the month and that way you won’t be able to skip the payment
- Find your exact payoff date: Once you know how much you are going to pay off each month, find out when your payoff date is going to be. Mark this on your calendar! Keep reminders everywhere.
- If you get extra income, make an extra payment: I do this all the time. If I get a side project or some extra cash, I use it to pay off my debt. This will really add up over time.
- Consolidate your loans and refinance to get the lowest possible rate: Refinancing your loans is one of the best things you can do, especially if you have high interest rates. This will lower your interest payments and allow your payments to pay off more principal every month.
- Take a job that offers loan forgiveness: There are a lot of jobs, like public service work, teaching, military, government jobs, and others, that offer forgiveness in part of all of your outstanding student loans. This can be tens of thousands of dollars and all you have to do is meet their specific requirements to get your student loans forgiven. The requirements are usually a minimum amount of time to work at the job.
- Reduce your expenses and allocate more to your payoff: If you are unable to make more money, look at decreasing your expenses. Even little cuts can help. This can include canceling your TV for a few months, not eating out, and not taking vacations for a period of time.
- Pay off debts with the highest interest rate: If you have multiple loans with different interest rates, make sure you start with the loans with the highest interest rates.
- Stop procrastinating! Now is the time to act. If you put it off, the worse it is going to get. I promise you will be so happy once you are done and student debt free!