The question of how to get rid of student loans is massive topic in America right now. Whether you are tuning in to a national political debate or simply getting lunch with your friends, it’s an impossible conversation to avoid. That’s because there is more than a trillion dollars in outstanding student loan debt in the country right now. In an economy that isn’t always hospitable, young people and others may find these massive debts impossible to get rid of. Here are some tips for how to finally do away with them.
Tips to help get rid of student loans:
- Pay down higher interest rates first: If you have multiple student loans, don’t forget that not all of these debts are created equal. Make payments on all your loans, but if you want to start paying them down, start with loans that have a higher interest rate. This will help you reduce the total amount of interest you end up paying.
- Get educated on your options and consider consolidation. Depending on when you took out your loans, consolidation could save you a ton of money. Loans taken out before July 2006 will be more affordable if you roll them all into one federal loan. This will help you lock down a better interest rate. Loans since that time will not benefit from consolidation. This is only one of many ways in which learning about debt can help with your loans, however. Researching the nature of debt and how it works is a crucial step in escaping student loans.
- Research programs that will repay your loans: This isn’t an option for everyone, but there are a variety of programs out there that will help repay your loans, including public service, Teach For America and doing nurse work for nonprofits. Here is a good list of programs that will help you pay your student debt. See if any of these programs appeal to you.
- Create a budget and stick to it: This one is easier said than done, but in order to reserve extra money to get rid of student loans, you are going to need to spend less than you earn. It will be far easier to do this if you track your spending and create a plan to live below your means. Simply making a mental note to spend less isn’t going to work. Sit down and do things right. Cutting costs can be painful, but the financial freedom will be worth it.
- Get automatic payments: This one is simple, but if you sign up for automatic payments it can actually reduce your interest rate. The reward is small, but it takes very little work. Every little bit can help.
The journey of paying down student debt is going to be different for everyone. For some, simply learning a few tips can be a big help. For others, it is coming to a long labor that involves major lifestyle changes. The point is that no matter how daunting those loans may feel right now, there is always a path to get out from under them.
Kevin D. Judd is Washington D.C. bankruptcy lawyer. He fights to provide his clients with financial freedom and success.