Do you feel like you aren’t making progress conquering your student debt? Are you tired of having to cut back on things you love in order to be able to make your student loan payments? The Federal Reserve Board Survey of Consumer Finances reports that the average graduate ends up with a massive $40,000 loan debt.
It’s easy to feel overwhelmed by having to deal with the same student loan debt payment every month – you see a couple hundred bucks disappear from your checking account month after month, but don’t see your balance due diminishing much. It doesn’t have to be that way, though. By exercising a bit of creativity, you can reduce your debt faster without resorting to eating ramen noodles at every meal.
Of course, the best way to handle student debt is to make smart choices about how you will fund your education from the start. For example, New Jersey students can get student loan information from the Higher Education Student Assistance Authority (HESAA), such as supplemental loans like the New Jersey College Loans to Assist State Students (NJCLASS) for college expenses not covered by other sources of loans, scholarships and grants.
The following are some unconventional strategies you can use to conquer your student loan debt:
- Do some good. If you enjoy helping others, you can have your student loans forgiven by choosing a career in public service. The Public Service Student Loan Forgiveness Program (PSLF) may help you wipe away your Federal Student Loan debt. Military, non-profit, law enforcement, public health, public school administration, or government jobs may qualify you for debt forgiveness.
- Let your employer foot the bill. Many employers recognize the impact huge student debt can have on their employees, and are open to including some student loan reimbursement as part of their benefits package.
- Choose a job that is in demand. When it comes to paying off your student debt, some jobs are better than others. Not only will you eventually make more money, allowing you to pay your debt faster, but some professions such as teachers and nurses offer special student loan forgiveness programs.
- Move somewhere cheaper. Your biggest post-college expense will probably be rent. By moving somewhere affordable, living frugally and taking on a roommate, you can save money – which can be used to pay your debt down quicker. While moving to a more affordable location in town is a good idea, sometimes moving to a more affordable state will save you more.
Take your deductions. When you pay back your student loans, a portion of that is interest on them. When you file your taxes, you can get a nice tax break by deducting up to $4,000 for interest on qualifying student loans. Additionally, you can claim up to $2,500 with the American Opportunity Tax Credit for qualified higher education expenses.- Make the most of your grace period. You may have a grace period after graduation, depending on your loan type. During this time you aren’t required to make any payments toward your student loans. Instead of ignoring your debt during this time, start making payments now. You will save significantly in the long run.
- Make auto-debit payments. Depending on your lender, enrolling in an automatic payment program can reduce your interest rate. For example, if you qualify, Sally Mae provides a .25 percent interest reduction on your loan. While this may seem like a small amount, that results in significant savings over time. Plus, you’ll avoid missing payments and incurring fees, which will increase the amount you owe.
- Don’t incur more debt. While it is tempting to commit to significant financial obligations after graduation, such as purchasing a vehicle, buying a home or getting married, those debts will make it more difficult to get out from under your student loan debt. Instead, opt for less pricey options or put those decisions off until your loan debt is repaid.
