It is said that an investment in knowledge pays the best interest. As a college student, you will likely end up graduating with student debt. Student loan debts are at an all-time high in 2019. There are 44.7 million Americans that owe student loan debts worth $1.56 trillion collectively.
Among the class of 2018, 69% of college students graduated with $29,800 in student loan debt, both federal and private debt. Before you go to Cami Jones & Company’s sale page to put your house on the market, evaluate your life and see how you can make the necessary adjustments to get you out of debt.
An increase in school loans was brought about by the recession where the unemployed sought to add to their skills. The Affordable Care Act (2010) allowed the government to take control of the student loan program, replacing Sallie Mae as an administrator.
Taking out the middle-man lowers the costs and increases the availability of educational assistance. The federal government guarantees school loans even if there are no assets for collateral. The country benefits from a skilled workforce as it creates a healthy economy and reduces income inequality.
Getting out of your student debt is possible with the right tools, motivation, and determination. Here are some practical ways to overcome student loan debts.
1. Make the Most of Every Penny
A working budget is crucial to paying off debt. Experts recommend the 50/30/20 scheme, where you keep your expenses to 50% of your income, allot 30% for your wants and set aside 20% for savings and debt payments.
Since your primary goal is getting rid of your debt, you can divert some money, if not all, from your wants budget and add it to pay for your debts.
2. Increase Your Income
You don’t necessarily have to go out and get a second job to increase your income. Simple things like renting out your parking spot or walking the neighbors’ dogs or even selling photography can get you a little extra money to help pay off your debts.
Some folks sell personal stuff they no longer use or offer tutoring classes for other students to add to their salary. Be creative. There are a lot of things you can make money off.
3. Prioritize Your Expenses
The goal is to pay off your student debt, not get the latest gadget or designer bag. Do not fall into the big spender trap. If you find yourself falling behind on savings, buying things out of impulse, or constantly breaking your budget then chances are, you already are overspending.
Analyze your expenses and make the necessary adjustments to help you save as much money. Instead of eating out all the time, cook dinner at home and prep your meals ahead of time. It’s those little things that can make the difference.
4. Consider a Consolidation
Find out if debt consolidation applies to you. Having all your loans rolled into one single payment could prove helpful, especially if your debt isn’t excessive and you have good credit standing.
5. Get Motivation
Think of your near and long term financial goals. Planning to buy a house or take the family on a trip? Knowing your “why” gives you the proper motivation to get rid of your debt as quickly as you can. You need to have a clear reason why you want to get out of debt.
Education comes at a high price, but it should never take away from you enjoying life.