5 Ways to Dig Out of Student Debt Faster

“There is scarcely anything that drags a person down like debt.”

– P. T. Barnum

 

Congratulations graduate! You’ve made it to the finish line, now all that’s left is landing your first real job and (gulp) starting to make payments on your student loans (double gulp). Here are some practical strategies to help you dig out of student debt faster.

  1. Crunch your numbers. List your income and all your expenses, including loan payments. Look at ways you can cut your budget to pay back your loans faster. Get a roommate (hey, it was pretty fun in college, right?), opt for less expensive streaming services by watching a few ads and skip the yearly iPhone upgrade — for now.
  2. Put found money toward debt. Not the kind that fell off the back of a truck, but tax refunds, gift money, employment signing bonuses, etc. All these can help you get out from under your student loans sooner. And you’re less likely to miss money you weren’t counting on to begin with.
  3. Beef up monthly payments. Paying more than the minimum will dig you out of debt faster and help save on total interest over the life of the loan. Instead of one full payment once a  month, divide your payment in two and pay every two weeks. It’s that simple. You’ll end up making 13 payments per year instead of 12 and that’s the secret — just check with your lender to see if they will accept extra payments and apply them in a way that lowers the balance faster (toward principal). Use an online biweekly loan calculator to see how much you can save.
  4. Pick up a side hustle. Do some freelance work on Fiverr or freelancer.com if you have IT, writing or design skills. Or Uber around town in your free time — every little bit helps.
  5. Try to qualify for loan forgiveness. Certain jobs may discharge your debt altogether. Check with your lender to see if military service or teaching in a low-income area may qualify you. Also, certain public service, government or nonprofit jobs may hold your key to debt freedom.

Getting out from under debt can help you achieve personal and financial milestones like buying a house or starting a family more quickly. Plus getting a head start on your retirement savings early on, even with relatively small amounts, can make a huge difference when those contributions can benefit from compound interest and tax-deferred growth over time. Don’t let student debt put a drag on your future. Once you have adequate emergency savings stashed away, do what it takes  to automate and escalate your debt reduction efforts. Your future self will thank you.

Source

https://www.usatoday.com/story/money/personalfinance/2013/09/06/student-loan-forgiveness-options/2776545/