Got student loans? You’re not alone. According to Student Loan Hero, in 2019, college students graduated with an average debt of $29,900.
If you’re in debt today, the good news is that you can get it under control. Read on for seven strategies for you to try.
1. Run a quick student debt assessment.
The first step to paying your loans will be to assess your true levels of debt. To get started you’ll want to:
- Review your loan history: Pull out the details of all the student loans you might have and also check your credit to see what is listed on there under your student loans.
- Determine your loan balances and interest rates: By determining your balances and associated interest rates, you’ll be able to prioritize your debt accordingly.
2. Make a payment plan.
Paying off debt without a plan is like shooting in the dark, but putting together a concrete plan is easy to do. As a quick guide to getting started, you can:
- Build your student loan payments into your budget and plan to pay more than the minimum if you can afford to. By doing this, you are including your loans as one of your bills that you pay every month and will allow you to make consistent payments. Also, paying more than the minimum will allow you to pay off your loans sooner and save money on interest.
- Map out your priorities. In addition to student loans, you may have other debt to pay off that you’ll need to factor into your plan. You can choose to do this in one of two ways — either by paying off the smallest amount and working your way up to the largest which will give you quick wins with getting accounts paid off and closed our. Or you can pay off the debt with the highest interest and work your way to the debt with the lowest interest which will save you the most amount of money on interest payments.
- Now that you know your debts, you’ll want to knock them out one by one. It’s a clean and efficient way to pay off student loans.
3. Consider getting a side hustle.
You’re fresh out of college and ready to take on the world. Why not take on a side hustle to help you get out of debt more quickly? A side hustle can help you generate additional income that can be used to pay down your loans faster. From catering to child care to online freelance work, there are tons of options.
Some great ways to find side hustles are by inquiring within your network, looking at open retail positions online, or posting websites like care.com (for childcare) or fiverr.com (for a variety of freelance work).
4. Put together a budget.
The bread and butter of any strategy to get out of debt will revolve around a budget, and you should include your monthly student loan payments. Another thing to remember? You’ve got to resist the urge to use your first paychecks to splurge on things you don’t really need. Focus on the long term.
To establish a budget, be sure it includes what you expect to earn as well as your spending categories and the budgeted amount for each category. As you make progress through the month, you’ll want to check in frequently to track your actual earnings and actual spending.
5. Sell items you don’t need.
Used books, furniture, and clothes — things that you look at as old and unwanted, may be treasure to someone else. And you might be able to get some cash for your old stuff.
Consider selling things that you no longer need on sites like Facebook Marketplace or eBay. These are popular and easy to use websites.
6. Explore loan forgiveness options,
You may find yourself overwhelmed with no end in sight to the payments. Rest assured, there are options. Loan forgiveness programs exist to help people in all sorts of situations. Some come in the form of contests, and winning is based on votes.
Many employers offer loan forgiveness programs for military personnel, teachers, nurses, child care providers, etc., so it’s definitely worth the time to do the research to see if your employer offers such a program. If you are currently job hunting, you can plan to apply to jobs where forgiveness programs are offered. Simply asking a prospective employer if they offer loan forgiveness is a key step.
Keep in mind that student loan forgiveness is not a given. Rules and laws change. You should check your eligibility to determine if it’s a realistic pursuit. Studentaid.gov is a great starting point and you can also reach out directly to your loan servicer.
About the Author
Bola is a Certified Financial Education Instructor (CFEI), finance expert, author, speaker, and founder of Clever Girl Finance, a financial education platform and community for women empowering them to achieve financial wellness and live life on their own terms. Clever Girl Finance is one of the largest personal finance platforms for women in the U.S. In addition, Bola and Clever Girl Finance have been featured by several media outlets including Time.com, Money Magazine, CNBC, Forbes, Fast Company, Essence, Black Enterprise, Cheddar TV, ABC News, Good Morning America, Fox Business and The Chicago Tribune as well as on several other finance websites and podcasts.
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