Investing in your education can be a wonderful thing for your self-development. However, the average student will graduate with more than $37,000 in student loan debt. If you count yourself among them, then chances are you’re probably wondering how you’ll pay off your own student loan debt. But don’t worry—there’s a solution. However overwhelming your debt might seem, there are some very viable solutions for paying off your loans fast.
The Debt Snowball
The debt snowball counts as one of the best defenses you have against student debt. It allows you to use the power of momentum and a large dose of psychology to make a serious dent in your debt in a very short amount of time. List your debts smallest to largest—pay minimums on everything but the little one—and attack the little one with a vengeance. While it might seem counterproductive to pay the smallest debt first instead of the one with the highest interest rate. If you can see progress toward your debts immediately, then you’ll feel motivated to keep going.
Once you pay off the small debt, you then move onto the next one, diverting all of your extra money toward the debt. If you still have more debt than you have income, then you may want to look into a consolidation loan to help you get started with your debt snowball. Many students opt for a loan consolidation plan since consolidation can get you a smaller monthly payment, according to CollegeAmerica.
Get a Second Job
If you’ve decided that you’re going to try the debt snowball method in the previous section, then you should opt to get a second job if you want to compound the effects of the debt snowball. It’s becoming more and more common for people to pick up a side hustle. In fact, as many as 37 percent of American adults report to having a side gig, according to Xyngular.
The debt snowball basically requires you to put all of your extra money toward your debt. (Your extra money is defined here as the money you have left over after you pay for necessities like rent, food, and utilities.) It is assumed that you’ll have some money left over from your regular source of income, which should go toward your debt. Adding an extra job for fifteen hours a week that pays you even $10 an hour will give you $600 extra at the end of each month. Use that money to put a big dent in your student loan debt.
Participate in Student Loan Forgiveness Programs
Certain professions, as well as some former students, qualify for student loan forgiveness programs. These programs allow students to be forgiven for some or all of their student debt, depending upon the student’s situation.
Among the most common types of programs are the ones that offer you student loan forgiveness if you work in the public sector. While many of these jobs center around teaching in high-risk areas, that isn’t the case with all of them. People who work for nonprofits or for the government can qualify, too. Other types of repayment programs allow students to pay based on their incomes, with some of the balance of the loans being forgiven after a certain number of years—usually about twenty.
Find Ways to Avoid Taking Out Loans
If it is possible to avoid debt altogether, then that is the best option. There are a couple of ways to do this. First Alliance Credit Union suggests working during high school to save money for college. Scholarships are another option and also look good on a resume. If you are awarded financial aid, then you can often get work-study in place of student loans.
Some other options include working during college, taking some college-level courses in high school, or spending your first several years of college at a community college. In the latter case, a class at a community college may cost you about a third of what it would cost at a university, according to Study.com.
Having significant student debt can make you feel like you’re climbing a mountain just to pay it off. Fortunately, there are ways to pay off your student debt quickly if you’re really focused. Using one of these tips will definitely save you time and money. Using two or more in tandem will really take a bite out of your debt in a hurry.