The latest statistics say that total US student loan debt stands at approximately $1.5 trillion. If you are struggling to get out from under the burden of student loan debt, you are not alone. And even if you do not have student loans, you probably have other student debt, such as credit card charges. Debt holds you back from moving forward with your financial goals.
Here are 7 steps to pay off your student debt.
Put Your Budget on a Diet
For now, your primary focus is on paying off your student debt. The best way to increase the amount of money available each month to put toward this goal is to reduce your expenses. Create a budget that maximizes your income. Look for the places where you might be wasting money, such as utilities, cable and streaming subscriptions, entertainment, and grocery shopping. Reduce these expenditures, and you will have more money to pay off your student debt.
Negotiate Your Repayment Plan
Something as simple as changing the date your student debt payment is due could help you avoid late payment penalties. When you pay late or skip payments, you incur fees that ultimately extend your debt. If your student loan payment is due on the same date as your rent or credit card bill, it could be difficult to make the payment. Contact your lender and ask for the payment date to be rescheduled to a more favorable time to your monthly cash flow.
Refinancing your student loan debt is a great way to take advantage of better interest rates. You will make better progress toward paying off your student debt if you can lower the amount going to interest. Consolidating student debt is another option. You take out a new loan that combines all your student debt into a single loan payment. Now that you have graduated and are employed, you are a better credit risk. The result is that you should net a much better interest rate.
Put Your Debt Payments on Autopilot
Automating your student debt payments saves you late fees and creeping interest rates. Also, many lenders offer a small discount when you enroll in automatic payments. Be sure to continually track your money and follow your budget so that you have cash in your bank account to cover the automatic deduction. You can pay off student debt quickly and with peace of mind.
Look for Jobs that Help You Pay Off Student Debt
Many employers offer student debt assistance packages as a part of their employee benefits. If you are willing to enter certain career fields such as nursing, public service, educator, etc. you may qualify for student loan forgiveness. If you haven’t sorted out your career path yet, you might want to choose one that will help you pay off your student debt more quickly.
Increase Your Income
Paying off student debt when you can barely cover the monthly bills is close to impossible. If you have tightened your budget and reduced unnecessary spending, and are still struggling to make the payments, you might want to look for ways to increase your income. If getting a better salary is not an option, consider taking a gig job during the off hours. Put all your gig income toward student debt payments.
Student debt is a fact of life for millions of Americans. If you are overwhelmed, the above steps can help you become debt-free more quickly.