4 Ways to Ease the Burden of Your Student Loan Debt
Hillary Clinton and Bernie Sanders discussed student loan debt at a rally in New Hampshire this past Wednesday, a key tactic to win over younger voters.
It is a goal of Clinton’s to make college more affordable, including enabling all students with a family income of under $125,000 to attend an in-state public college or university, tuition-free. Whether you are a college freshman or a recent graduate, student loans are most likely top of mind. This complex and confusing process often leaves students, parents and guardians at a loss and can lead them to regret certain decisions later on.
According to data compiled by the Consumer Financial Protection Bureau, the total amount of outstanding student loans are about $1.3 trillion, with the average 2016 graduate carrying $37,172 in student loan debt.
As more individuals opt to pursue a college education, student loan repayment has become an increasingly important issue. Getting a college education is a high priority and student loans, public and private, are often the primary means to finance it. The future is hopeful for making college more affordable, but in the mean time, here are some tips to help make the best possible decisions with payment for higher education:
It’s Never Too Early (or Too Late) to Look for Free Money
Start looking at grants and scholarships as early as possible to minimize the amount of student loan debt you need to take on. Websites such as collegescholarship.org, fastweb.com, and studentscholarshipsearch.com, provide information on scholarships and grants by category, as well as how to apply for them.
Do Not Take on a Debt Load That is Expected to be Greater Than Your First Year Salary
This may be hard to forecast because you may not be able to predict what your starting salary will be upon graduating from college. To get a better idea of what your expected starting salary will be, look at websites such as salary.com, payscale.com, and glassdoor.com. Then multiply the amount of your first year loan by the number of years you will be in school to see how much debt you should expect to graduate with. You should aim for your total debt to be no more than 15% of your monthly gross income. If your total student loan debt exceeds your monthly income, it will be a challenge to save and financially balance your lifestyle along with paying back your student loans.
Use Federal Loans Over Private Loans
Federal student loans typically offer more flexibility and advantages over private loans when it comes to terms of payment. Federal loans offer fixed interest rates, which help borrowers predict monthly payments, while private loan interest rates often fluctuate over time. Federal loans also often allow borrowers to defer their payments when they are enrolled in school or unemployed, whereas most private loans will expect repayment immediately. In addition, with federal loans, a cosigner will not be required to pay back the loan if the borrower can’t, but private loans will not let cosigners off the hook that easily.
Look for Ways to Slash Unnecessary Costs
Daily college living expenses can accumulate very easily between the costs of books, housing, food, campus events, entertainment, and transportation, among other things. Try to find used textbooks to cut down on the cost of buying books. Consider living at home or with roommates as a great way to cut back on living expenses. Look to cook more than dine out. Try to seek out free campus events and amenities in order to enjoy campus life without it affecting your wallet. Also many college campuses offer free transportation through campus and town. By minimizing expenses in other areas of your life, you will free up more money to pay back your student loan debt.
College is already a stressful time, and the last thing you need is to add financial woes to your stress. Only time will tell what this election has in store for the future of student loans. With any luck, future generations will have access to free, or at least much less expensive, education opportunities. In the mean time, look for ways to maximize your student loans, minimize your expenses during college, and choose the best repayment option. Tayne Law Group can provide you with valuable information to ease the burden of your student loans. If you are interested in finding out more about what repayment options are available to you, contact Tayne Law Group today for a free phone consultation.