Student loans. It’s crazy how so much emotion can be attached to those two little words. I almost twitch when I think about the missed vacations, outings with friends, and years I just couldn’t afford a place of my own. Thanks for letting me crash at your house mom and dad!
I don’t know whether it’s comforting or sad – but I’m certainly not the only millennial who has experienced this struggle. According to US News and World Report…
- 70% of students are graduating in debt
- The average 2016 college grad owes $37,162
- 59% of college graduates say they have no idea when their student loans will be paid off
The numbers don’t lie! Student debt is definitely a huge challenge for many millennials. So, what’s the solution? Check out these nine strategies for paying off your student loans as quickly as possible.
1. Know How Much Debt You Owe
The first step to getting rid of your student loans is figuring out how much you actually owe and what kind of interest rates you’re dealing with. Do you have any loans that have variable interest rates? Which of your loans has the highest interest rate? Which of your loans has the highest balance? There are many ways to attack debt, but these questions will help you get started.
2. Look Into Refinancing
Just because the interest rate on your student loan is 8.25% APR doesn’t mean you’re stuck with it! Wealth advisor Bob Galvak recommends shopping around with different lenders. “See what else is out there, who’s willing to give you a better rate or better terms,” Galvak says.
However, keep in mind that you may have to pay origination fees or other costs associated with refinancing. So, be sure to factor that into your decision.
3. Make More Than The Minimum Payment
This is one of the easiest ways to get rid of your student loans faster! Don’t feel bad about starting small. Even if it’s an extra $20, it’s something. Depending on your budget, sometimes gradually increasing your payment is best. You can always add more later! Just be sure to work with your lender and make sure anything extra goes straight toward your principle.
4. Be Smart About Your Spending
So you have your first post-grad job now! Of course, you want to go shopping, have fun with fiends – and there’ nothing wrong with that. Just don’t go crazy! There are definite benefits to living frugally. Villanova grad Andrew Meyer paid his student loans off in just four years by postponing a car purchase, living with roommates, and bringing his lunch to work instead of eating out.
5. Find A Side Hustle
Whether it’s becoming an Uber driver, blogging, or just using your bonuses and commissions – putting extra dough towards your student loan payments will definitely help you get out of debt faster!
Michelle Schroeder, 25, supplemented her entry level income by writing for websites and working as a secret shopper. She paid off $40,000 in just 11 months! After she dumped her debt, Michelle left her full time job. Now, she’s her own boss and writes a blog called Making Sense of Cents.
6. Check And Double Check Your Payments Are Properly Applied
I sent my payment in early. Everything should be ok, right? Think again! With thousands of grads paying the same lender by check, direct debit, or electronic bill pay – anything can happen. Always double check your statements or online access when you see your payment leave your account. “It’s up to the borrower to make sure everything is being handled properly,” Galvak says.
7. Take A Job That Offers Student Loan Forgiveness
Although these golden nuggets may not exist in every industry, there are certain jobs out there that offer forgiveness for all or part of your student loans. AND, they pay you too! Pretty awesome, right?
If you’re not afraid to teach for a little while or do some public service work, this could be a great opportunity and experience for you. Just be sure to do your research and make sure you’re ok with all of the rules and requirements.
8. Sign Up For Automatic Payments
Who really enjoys snail mail? I didn’t think so! If you have federal student loans, you can get a .25% interest rate deduction just for signing up for automatic payments. Plus, it just makes life easier! No more worries about missing or late payments. Auto payments really are an easy win. You’ll get a few bucks back, and your schedule and credit score will thank you.
9. Pay Every Two Weeks
Ok, don’t panic! We’re not advocating that you double the amount of your monthly payments. But, here’s a little tip from studentloanhero.com:
- Split your monthly payment in half
- Make a payment of that amount every two weeks
By doing this, you’ll make a full extra payment over the year. And, if you receive a bi-weekly paycheck, you shouldn’t even feel it!
Student loan debt can be incredibly frustrating, but with a little determination, you can overcome it. Keep your chin up! And, if you have any tips that we didn’t mention, be sure to share them with us on Facebook or Twitter.