Whether you’re about to graduate from college or high school, student loans may be weighting heaving on your mind. These pesky little pieces of paper that help you make your way through college can seem to start off as only a minor threat, but by the time you’re ready to start paying on them, you may feel like they are causing your world to quickly crumble around you. Luckily, there’s a few things you can do to help get this unwanted debt out of your hair a lot faster. This will certainly help create piece of mind, while also keeping your expenses down. Between interest costs piling up and paying on the bills you have to, your financial life may be a disaster. Take a deep breath though, because there is a light at the end of the tunnel and these tips will help you make it through a whole lot faster.
1. Pay Extra
Money isn’t always going to be on your side, but when you are feeling more comfortable with your financial stance, make sure to pay a little extra on your loans. This will help cut down the interest costs, by paying them before they add up and force you to spend even more on them. The best policy is to add whatever you can extra to each billing cycle. You could even pay the bill twice a month, to help cut down on the amount you’re knocking off of your loan. Even if you don’t have a lot to spare, you can quickly make a difference by tossing in a little extra. For instance, if you can, put in an extra $5. Even if things are too tight to swing this on your budget, you may simply consider rounding the cent portion of your bill up to the next dollar. This will still give you that extra cushion, so you won’t spend as much as the years pass.
2. Consider Consolidation
Before it’s all said and done, a lot of students wind up with a lot of different loans from a lot of different places. This can be really hard to keep up with, even for the most well organized people around. Worse yet, even if you have a series of many small loans, your average monthly payment is going to be about $50 per loan, depending on the amount. Since all your loans are from various companies, you may find that this adds up faster than you’d like it to. One solution, is to consolidate your loans. This basically means that a company is going to take all of your student loan debt and add it together so you’re only paying one monthly bill. This can be a huge relief, especially if you’re struggling with money straight out of school anyway. Of course, you should make sure to look around when you’re consolidating your debt, as some companies charge more than others. If you’re not sure how to even go about this then make sure to meet with a financial advisor, before the student loan bills start coming in the mail.
3. Auto Enrollment
Paying online is probably one of the most common ways to take care of bills these days. However, signing up for auto-enrollment seems to make people a bit nervous. It makes sense that you’d want to have control over when money is going to come out of your bank, but when it comes to paying your student loans, you may want to stick with the auto-enrollment plan. A lot of loan companies will actually take a small percent off of your loan interest or provide you with another reward when you sign up for this method. It reassures them that you will be paying your loan while offering you a little money back on your investment. Although you will have money coming out on a certain day of the month, you will gradually get used to it, especially when you enjoy the fact that it’s saving you some money.
4. Employer Benefits
So, you’ve finally got the degree and the job, but the student loans are making this big success feel like a huge drag. There’s one bit of silver lining to this though. In fact, a lot of employers will actually help their employees pay their loans. If you know your company invests a lot into its employees, then there’s a pretty good chance that they have a program to help you with your tuition needs. Try asking your co-workers to see if they’ve taken advantage of such a program. Chances are, people may not know about it even if it does exist though. If this is the case, then don’t freak out. Instead, try talking to someone above you. Eventually, you’ll work your way to the very top, and if the company isn’t already running such a program then they may be inspired to do so after seeing how hard you’ve looked into it.
5. Loan Forgiveness
Believe it or not, there are actually federally run loan forgiveness programs out there, which can help you get rid of some, if not all, of your student loan debt. The bad news is; these programs aren’t available for most people. They generally work around certain jobs. However, if you feel like you’ve been scammed by your school or your school is under investigation, then by all means keep an eye on the progress of the school’s case and put in the paperwork for a loan forgiveness based on the school’s fraud. More and more cases like this have appeared recently. All the same, if you’re a teacher then you may also be entitled to some loan forgiveness. However, you must work at an under privileged school for some time and meet some other criteria. It’s worth going for though if you know you’re going to be working hard in the first few years after college.
6. Tax Deductions
Paying on student loans is pretty much no fun. However, at the end of the year, there may be a little extra pep in your step when you see that all of the money you paid on the interest could come back to you. Each loan company sends out tax forms with the interest you paid, so you can file this as a tax deduction. Depending on your tax bracket, you should get a good chunk of this money back, which will come in handy. Sure, you can probably splurge and spend this money on something fun, which might lift your spirits. However, the best thing to do with is to put it right back on the loan. This will help pay off the premium balance faster, so you can enjoy having your student loans paid off quicker than you thought possible. It’s almost like getting back reward money from your credit cards, so use it wisely.
7. Volunteer
There’s a lot of great volunteer programs in the country right now. Peace Corps is one of the more famous options. This charity work allows you to see the world, which is always spectacular. While you’re away helping make the world a better place, loan companies will have to defer your loans, so you won’t have to worry about them unless they have a major interest rate. After some time in service, you will receive a stipend for your services, which can go directly to your loan. There’s other ways to give back to the community that don’t involve going abroad. In fact, there’s many programs in this country now that allow you to volunteer in order to put money towards your student loans. These programs encompass things like building homes, working in soup kitchens and cleaning up parks. Plus, they’re a great way to give back to the community on your day off. Although, it may take some time to make a dent in your loans this way, it will allow you to add extra to the loan each month, which will help cut down on interest.
8. Work During Deferment Periods
A lot of students wind up with their student loans deferred while they go to school, which is fantastic. However, for many students, this adds to the whole out of sight out of mind effect that causes the student loan to go from a normal number to one that is the thing of nightmares. This is especially the case if you wind up with a loan that is unsubsidized. Even though you’re probably going to be pushing your limits in school, you might want to consider getting a part time job. Even doing work study at the school can help you earn some extra money. Some of this money can go straight onto your loan, so you won’t wind up having to deal with massive amounts of interest before you land your dream job, or at least the job that may eventually land you your dream job.
9. Have an Emergency Fund
We’re just now breaking out of the bad economy, and if you’ve had to deal with this problem then you probably know being prepared for anything is the best thing you can do. Thus, putting back money to pay your student loans for a month or two is one of the best things you can do for your finances. You never know when you might lose a job, or have to take unexpected time off, so don’t let this stand in the way of your monthly payment. Plus, when you defer these loans due to financial reasons, you still rack up interest. Being prepared to take on the loans without a deferment is your best bet. It might be wise to start with $1,000 in the bank to help with these types of emergencies, but try to build onto it as much as you can. You never know, your emergency fund could wind up paying your loan off completely if you manage to keep it in savings.
10. Meet an Advisor
It might seem counterintuitive to meet with a financial advisor when you’re trying to save money, but you may find it to be one of the wisest moves you’ll ever make. A financial advisor can sit down with you and look at all of your money coming in, as well as the money that will be coming out. With this information, the advisor can come up with a budget that won’t leave you in a bind for money. Most advisors will be able to work it so you have extra money to pay on the debt too. This will help you feel like you have a game plan, so it won’t simply feel like you’ll be paying on your loans until the end of time. This alone will make the bills less of a burden and will give you a sense of achievement for staying on track.
Student loans are pesky bills that can drive you crazy. However, without them you may not have the career you’ve always wanted. With these ten tips, you should be able to find the best ways to cut down on the amount you owe, while making it a bit easier to make those payments every month.
