Step by step is the best way to deal with student debt, and here are some steps to take.
You are graduating from college in a couple of months, and you are saddled with student debt that is going to affect your future life.
What do you do to cut down and shorten that effect?
Student loan debt has tripled in America since the mid-1990s and now estimates are that the average student graduates college with more than $35,000 in debt. According to the National Post secondary Student Aid Study, 71 percent of graduating college students have outstanding loans when they graduate.
Debt experts student loan debt is not that much different than other debt in how it is handled, but it is clear that graduates have to deal with the debt before they move on to other stages of life, including marriage and parenthood.
Online debt experts share strategies online and they all agree on several steps:
Pay off the loan with the lowest balance first. This creates a sense of financial accomplishment and reduces by one the number of debts to deal with monthly.
Take earnings out of your hand and into savings by maximizing the allowable contributions to company retirement plans such as 401(K) plans. Again, this is a positive use of available funds that creates s sense of accomplishment rather than the sense of trading financial water.
Live a lifestyle that does not incur further debt. Until the debt is paid off, the only way to improve your financial status is to reduce spending in order to have the funds to reduce debt.
Contact your loan companies to see if you qualify for loan forgiveness, debt consolidation or refinancing. Many credit companies offer such programs. Federal loans can be consolidated into a single direct loan through the U.S. Department of Education. They also offer low-cost repayment programs. Do not pay upfront fees to anyone offering to consolidate your loans.
Federal loans and loans offered by reputable banks take into consideration the debtor’s employment conditions and other factors in setting interest rates and repayment options. Nothing bad can happen by asking what can be done by either lender to reduce payments and debt amounts.
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