As of 2012, 70% of college graduates had incurred some level of student loan debt. This doesn’t account for the credit card and home loan debt students take on from the day they enroll in college to the day they graduate. On average, college and university graduates accumulate more than $20,000 of student loan debt.
Shortening the time students carry loan debt
State and federal government leaders have stepped forward and said that they are committing to developing programs and options graduates can access to help pay off student loans. Some of these options include consolidating student loans at reduced interest rates, refinancing student loans at APR rates that benefit students as much or more than they benefit lenders and providing a smoother entry from college to gainful employment.
According to the Huffington Post, there are programs that help pay off student loans if students volunteer or participate in charitable programs where they consistently use skills they learned while in college to help others. With these programs, students have to meet certain criteria. For example, they may need to show that they are having significant challenges to pay off student loans they took out while they were enrolled in school.
After students meet the necessary criteria, they identify how much they want to work while in the programs to pay off student loans. It’s also possible to pay off student loans by working for nonprofit organizations. Students will have to make 120 payments on their loans before their nonprofit work can be used to pay off a portion or all of the balances on their student loans.
Another step that graduates can take to pay off student loans include working internships while in school. After graduating, students can try to get hired full-time with the companies they worked internships with. Other tips that can be implemented to pay off student loans early include:
- Prioritize payments – This is especially important if graduates have several student loans to repay.
- Work out a plan – Contact lenders and work out a repayment plan with them, a plan that students can adhere to without falling behind in other expenses. According to Deseret News, the repayment plan should outline how graduates are going to get out of debt. This option can also be developed while working with financial advisors and debt counselors.
- Understand repayment options – By reading repayment options associated with student loans before they sign loan contracts, students could know what to expect and start preparing to prioritize their expenses and determine which repayment methods work best for them.
- Set up automatic payments – When they start to pay off student loans, graduates can make it easier to make payments if they have the money automatically deducted from their accounts. On the other hand, if their money is tight, graduates might want to have the option of making loan payments on a monthly schedule that works for them, a schedule that might change a day or two from month-to-month.
Getting into the habit of watching their spending habits and buying smartly are other steps graduates can take to pay off student loans early. Rather than focusing on what their peers have then trying to own similar items (i.e. wide screen televisions, the latest computer), graduates can stay focused on getting out of debt early so they can use their income to grow more wealth. To learn to how to pay off student loans, graduates can also contact private organizations that specialize in loan repayment plans.