For students who are working to earn advanced degrees and further their education, college level courses is a significant expense. The cost of tuition seems to rise each year, which can make affording a degree a difficult situation for most people. For this reason, many students have turned to student loans to help cover this cost, which often equates to a significant student loan debt after graduation.
The ongoing downturn in the economy means many recent graduates are unemployed or underemployed and paying off student loans can be a struggle in these situations. However, the current recession conditions means there are many assistance programs out there for both future and recent graduates who need help paying off their loan debt.
Here are some tips to consider when working toward wiping out student loan debt:
Create a Budget
Having a thorough understanding of your monthly expenses is the best way to ensure you can make regular payments toward student loans. Most student loan companies typically give students a grace period up to six months after graduation. This means that it is not necessary to start making payments for the first six months, which gives you some time to formulate a solid plan for repayment.
It is a good idea to sit down and create a list of monthly expenses and overall finances to plan for a monthly loan payment. If you can afford it, you should try to pay more than the minimum each month. The extra payment will go directly toward the principle of the loan, which will save you money on interest in the long run.
Look into Loan Programs
Though it varies by lender, many student loan companies have programs in place that are designed to assist students throughout the loan repayment process. Some companies will reduce the interest rate for signing up for automatic withdrawals from your personal bank account, for example. Consider calling the company in charge of your loan for more information on the incentive programs available.
Likewise, it may make financial sense to consolidate your student loans if you currently have more than one loan from education costs. This will help in the repayment process and will mean you only need to make one payment per month. Other programs are currently available for individuals working for charitable organizations such as the Peace Corps which will forgive loans in their entirety.
While it may seem difficult to wipe out student loan debt, it is possible to meet this goal through hard work and financial dedication.