Our topic is student-loan debt but many of these steps can help you get rid of almost any type of debt. You may feel that increasing your income would be the best way to help you get rid of debt. This is true, as far as it goes. But keep in mind that even if you have a solid income after completing college, much of that income will be used to pay off loans, including a lot of money for interest, instead of being used to buy a home and start a new job.
Thousands of Dollars
Hundreds of students take their college diploma with them after four years or more on campus. In addition, these students take a debt load amounting to thousands of dollars when they enter the workforce or start their chosen profession. Since these debts amount to $20,000, $40,000, $60,000 and more, students and their families need to take certain steps to reduce and eliminate student-loan debt.
In a general sense, paying down student-loan debt or reducing what you owe requires basic money management. At the start, you may have to do without a few extras and luxuries so that you can commit more toward making student loan payments. You should also learn all you can about the options you have when agreeing to student loans, so that you get the lowest interest rate possible.
Use the Web Site
Start keeping good records in a separate file. Make sure you have the total amount of all loans and the total amount you must pay on a monthly and/or annual basis. This is a target you are shooting for. You can’t hit a target if you can’t see it. Most of the information you need will be on the Web site of the National Student Loan Data System – nslds.ed.gov. You should be able to find how much your loan totals are, what the interest rate is, how much of each payment goes to principal and interest and how long you may be paying on the loan. You will probably have to set up an account and/or get a personal identification number (PIN).
If your loans are not part of the government system but are with a private lender, contact these lenders right away. Get the information outlined above so that you have complete knowledge of your student-loan obligations.
Make sure you know about any options for changing or resetting interest rates. When you are discussing such rates, make sure the lender or government Web site provides you with the information you need for increasing your payment or paying off the loans early. If you can manage the standard repayment program you will pay off your loan more quickly. There are alternatives that allow you to make very low monthly payments but these often pay only the interest. You will have a lot of principal to pay off when you can begin making larger payments. Tip: Be careful when you are considering loan consolidation. Make sure that combining two or more loans will really be a benefit. Sometimes a loan consolidation can actually be more expensive than two separate loans.
Finally, you may be able to literally get rid of student loans by working for the federal or state government. Some loans are forgiven based on years of public service while other loans are paid in part by the agency you work for. Be sure to look into this option for getting rid of student loans.