Last week, the blog started with statistics on student loan debt (70% of graduates have debt and the average debt is over $35,000). This week, we will discuss ways to eliminate that debt.
- Save as much as you can. Every dollar saved is one less dollar you will need to borrow.
- Ask your parents and grandparents to set up and contribute to college savings plans in lieu of giving you Christmas and birthday gifts. The closer you are to college, the more you will appreciate these alternative gifts.
- Apply for every scholarship you can. Just like savings, every dollar received in scholarship money is one less dollar you will need to borrow.
- Continue to apply for scholarships. There are many scholarships out there that are specifically for students who have finished one or more years of college.
- If you have non-subsidized Stafford loans or any other student loans that accrue interest while you are in college, try to pay the interest while you are still in school. Any interest that is not paid is added to the amount you borrowed and increases the amount you owe.
- Work part-time and use the money for your living expenses or for college expenses so you don’t have to borrow so much. However, make sure that your work schedule doesn’t interfere with your classes.
- Search for ways to decrease your expenses so you don’t have to borrow so much money.
- Live at home or with other family members.
- Barter with friends for services.
- Find social activities that are free or have limited cost.
- Share books, buy used books, or use e-books.
- Start making the loan payments as soon as you can even if you aren’t required to.
- Pay more than the minimum, especially on the higher interest loans. In other words, commit to paying off those student loans as soon as you can.
- If you are teaching full time in a low income elementary or secondary school for at least five consecutive years, you may qualify for Teacher Loan Forgiveness on your federal student loans. More information on this program can be found here https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/teacher.
- If you are employed full time in certain public service jobs and have made 120 payments on your federal student loans, you may qualify for Public Service Loan Forgiveness. For more information go here https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service.
Have questions or need help? Contact us at [email protected] or 402-502-0250.Judith Ackland has more than 26 years of experience in accountancy and financial planning, including seventeen years as a CFO of a diverse business. She started Crystal Financial in 2010 to help a wide array of individuals, families, and business owners better understand their finances and how good financial management could help them achieve their goals. Judith has an MA in Professional Accountancy from the University of Nebraska at Lincoln as well as a Certified Public Accountant Certificate and a Certified Financial Planner designation.