If you are one of the estimated 22.4 million people who have gone into even just a little bit of debt in order to attend college, then you might be a bit nervous about the ever-so-ominous burden of repaying student loans. But don’t let the dark cloud of student debt keep you from being hopeful about an otherwise bright future. The good news here is that people pay back loans all the time – believe it or not, it’s now a part of everyday life, and it absolutely is possible. They trick is to just learn how to manage your loans wisely.
The first step for managing student loans is to simply know them intimately. What’s that? Know your loans? Why would anyone want to spend any extra time or energy thinking about something so terrible? Because it’s smart. The fine print is annoying, but it’s important. Carefully keep track of how much you owe, what the interest rate is, who the lender is, etc. This is especially important, though a bit more difficult, when you have multiple loans from multiple lenders. You don’t want to forget about a loan and then accidentally not pay it off, only to end up owing an exorbitant amount of interest that you wouldn’t have owed otherwise.
You’ll also want to make a plan so that you can pay your loans back as quick as possible. Interest accrues over time, so the faster you pay off loans, the less time that interest has to pile on, and you’ll ultimately save a lot of money. If you can, try to pay them off while you’re still in school. Living at home (rent free!) this summer and working 40 hours per week at an entry level job might not sound very appealing, but it could be worth it if it helps you pay for this year’s tuition. If you’re able to pull that off, then that’s one less thing to worry about after you graduate. Even if you aren’t able to pay off your loans while you’re still in school, figure out how to pay them back as quickly as you can after May 2013 (or 2014, 2015, or 2016 – yes first years, this applies to you too).
This might be easier said than done. But if there is a way to do it, it will involve some of the following strategies: make payments on your loan more frequently than necessary (e.g. twice per month instead of just once), pay more than the minimum required payment, consider consolidating your loans (if you have more than one), talk to your bank about making monthly payments automatically online, so that you never miss a payment. These are small tricks that could actually go a long way in helping you get rid of that debt fast.
There’s one more great way to take care of your loans – and this one’s pretty good. Once you’ve graduated and (hopefully) found a job, find out if your job entitles you to loan deferment or forgiveness. For example, full-time in public service employees are eligible for loan forgiveness after ten years on the job. Volunteers in programs such as AmeriCorps, City Year, and the Peace Corps are eligible for all sorts of fun things, including loan deferment, loan forgiveness, or a monetary award that goes toward the repayment of student loans (after a few years of service, of course). This is just another reason for an Eastern student to consider entering the non-profit sector after graduation.
Of course, all of this takes a lot of patience, planning, and (…ahem…) money. But don’t let the fear of not being able to manage your loans prevent you from being pro-active about paying them off.
Sources:
www.washingtonpost.com
www.wisebread.com