Majority of young Americans begin their professional lives with student loans. An average American college graduate owes more than $35,000 in student loans and takes an average of 17 years to repay it. These figures are alarming to say the least. However, there are many ways to get rid of student loans. The process mainly consists of taking control, making the most of what you have, setting goals, looking for opportunities, avoiding pitfalls and managing adversity. Let us find out ways to get rid of private and federal student loans.
1. Understand student loans
Find out how much you need to borrow. It is very important that you know how much your education is going to cost. You may even need to weigh your options as to whether it is worth the price. Explore all your possibilities before you take a loan. For qualified students, there are many merit based and need based scholarships available. Also, nearly 2/5th of colleges in the country also have a no-loan policy for low-income group students. Once you know of all options, you can apply for a FAFSA which is a federal loan. Many private lenders are also available to give student loans.
2. Refinancing options
If you are already in debt, seek out refinancing options to consolidate the debt. Not all debt is bad but you must carefully consider if it is worth taking on.
3. Subsidize your education in other ways
Apart from scholarships, you can also seek other options like free boarding etc to get rid of student loans. This may entail working as advisory to younger students or being employed as a resident advisor. You could also become eligible for a stipend if you serve in some official capacity. Get a part-time job the advantage being that many on-campus jobs are flexible and usually work within your schedule. If you are working towards graduation, try and get assistantship or look for a job to help pay for tuition.
4. Look for scholarships
Never give up looking for scholarships. Do not stop even after your senior year of high school and regularly check with your department and guidance counselor about scholarship opportunities. Websites like Fastweb can help you find scholarships available.
5. Try for community colleges
A great way to avoid requiring a student loan is to opt for programs in public in-state Universities or community colleges. This can reduce travel costs and you get to be closer to family.
6. Never use 401 K or IRA to pay for education
Using IRA or 401 K funds for funding education can leave your parents short of funds in their old age. This could even lead to dependency on you after their retirement.
7. Seek loan forgiveness options
This is the most sought-after way of never paying student loans back. There are several loan forgiveness options which you can try for. Examples include community service, military and air force plans, National Guard student loan repayment program, Attorney student loan repayment program, Faculty programs, Native Health Services, National Health Service Corps, Nurse Corps, Public Service, etc. Another option to get forgiveness for student loans is for spouses of applicants in public service or those who became disabled in disaster. This can give you 100% of loan that you had applied for.
8. Seek loan discharge options
Borrowers can also seek discharge options in case the school closes while being enrolled or within 90 days of dropping out. There is also an unpaid refund option which can help you receive all or partial amount of the unpaid loan. Financial hardship, bankruptcy are some other options in this category. Pay as you earn and loan contingent programs also come under this category.
9. Plan a monthly budget
This will help not just with wealth building but will also prevent you from overspending.
10. Spend wisely
This one is a no brainer as money saved is equivalent to money earned. So do consider before splurging. Is the latest iPhone a want or a need? Do you really have to eat out every day? Slowly and steadily this can help you accumulate savings which can considerably ease the pressure on your wallet.
11. Do your research for future employment
Research what kind of job you want. Perhaps you can go to a vocational school to acquire necessary skills. The sooner you start earning, the faster you’d get rid of your student loans.