2017 is a new year, and it might finally be time to tackle your student loans. If you are struggling with student debt, you are far from alone. More than 40 million Americans have student loans, and there is currently 1.3 trillion dollars of outstanding student debt in the economy. While others might be giving up smoking or hitting the gym for their New Years’ resolutions, this might be your time to commit to escaping that burden. Here’s a look at how to get started.
How to Finally Tackle Your Student Loans in 2017
- Start making extra payments: There is nothing in your student loan that says you have to pay it off in small increments. The payments most people make are the minimum required by the loan. Your lender likes it when you take this approach, because the longer it takes you to pay off your loans, the more you will end up paying in interest. Try budgeting to take a larger chunk out of your loan each month. It might be harder right now, but it will mean you end up paying less in the long run.
- Consider refinancing: Refinancing is when you take a new loan that allows you to pay off your existing debt. This can mean you get a better interest rate and other more attractive terms. Do your homework, however, because refinancing student debt can also have its disadvantages.
- Research forgiveness programs: Are you a nurse, doctor, teacher or federal employee? If so, you might not have to pay those debts. There are a surprising number of student loan forgiveness programs out there. It might not be the answer to your particular situation, but it would be foolish not to explore the options.
- Use a bonus or side income: Some people find it helpful to allocate their bonuses, side gigs or tax returns towards their student loans, while budgeting their normal income towards everyday living. This can be an effective way to take big chunks out of the principle debt while also still making those regular payments. If you don’t get bonuses, you can consider taking on a small supplementary income and commit to using it to pay off debt.
If paying off student debt were easy, everyone would be debt-free. It takes a serious commitment, often over many years. The important part is that you make 2017 the year where you get serious about paying off your loans for good.
Kevin D. Judd is a DC bankruptcy lawyer who fights to provide his clients with a gateway to financial freedom.