Line of Defense: How to Combat Your College Debt
So you’ve graduated from college and landed yourself that dream job you’ve been working towards all these years. Unfortunately, those big paychecks might not go as far when you have a crushing student loan hanging over you. The most important thing you can do to combat this situation is to make a plan for how to deal with your student debt.
Paying Off More
If you did indeed manage to secure a good paying job, don’t just pay the minimum on your loan. If possible pay as much as you can. There are two ways you can do this. If possible, pay double the minimum amount, or if it’s easier to manage, pay the minimum twice a month. It may seem like a lot of money at first, but it will save you thousands over time. Making higher monthly payments will cut into the principle of your loan faster than paying the bare minimum. This means less interest in the long run.
Set Up a Debit
Once you have a solid payment schedule worked out, you can make even more progress by setting up an automatic debit with your financial institution. Enrolling in this program reduces your interest rate by %0.25. This may seem like a small percentage, but over the lifetime of your loan, it can really add up.
But what if your degree hasn’t paid off like you imagined it would? There are still options for you. The last thing you want to do is ignore your student loan payments. College debt cannot be cleared through bankruptcy, and defaulting on your loans can devastate your credit, hurting your finances even further. A simple thing you can do is to change your payment due date. Depending on your specific situation, having a bill due at the beginning or end of the month can make a huge difference. Many loan providers are willing to work with you on this. If you have multiple providers, it might be wise to consolidate your debt. Consolidating through a federally backed server such as Great Lakes can secure you a lower and more stable interest rate.
If you are still having trouble making payments, it might be a good idea to change payment plans. There are a handful of income based repayment plans available. Applying for one can help ensure that your loan payments are a manageable fraction of your overall budget. You could also talk to a Financial Guidance Center and see if they can help you come up with a more direct plan for paying off debt.
With the right plan, anybody can keep their student debt in good standing. Don’t let the anxiety of crushing debt ruin your plans for the future. Take action now.