Statistics show that student debt is the highest its ever been, reaching over $1.4 trillion, with the average graduate holding over $29,000 in debt.
Other findings reveal that 40% of student loan holders may default on their debt by 2023, over 3 million seniors are still paying off their student loans, and student debt is a common denominator in bankruptcy filings.
Student debt is meant to increase your future financial health by upping your earning power. However, if tuition debt gets out of hand—it can ruin you financially.
This is why you should seek student loan debt help. If your student debt feels like it’s snowballing, you need to get a handle on it.
Fortunately, there are a number of tricks, tips, and tools that you can use to get your student debt back in hand. Continue reading to find out what these are.
1. Be Careful of Income-Based Repayment Plans
One of the first options that people seeking student debt resolution often consider is income-based repayment plans. These plans are government-backed and are designed to offer relief to graduates who can’t make their debt payments.
Income-based repayment plans typically require you to pay a percentage of your income towards your student debt, over extended terms of 20-25 years. For example, the Revised Pay As You Earn program allows borrowers to pay 10% of their income over 25 years, or 20 years if the debt was created after 2014.
However, while these options might sound attractive, income-based repayment plans are not always the best choice.
By extending the terms and lowering payments you will take a lot longer to pay off your debt. Longer terms also lead to more interest, meaning that you will end up paying more than if you paid off your debt quickly.
Additionally, in some cases, low payments and extended terms can cause negative amortization. This is basically when your payments are not keeping up with the interest incurred. Over time negative amortization can cause your loan amount to rise exponentially, often by as much as a third of the original amount in just 10 years.
2. Seek out Employers That Offer Help With Student Loans
As the student debt crisis gains national coverage, an increasing number of employers are now offering assistance with student loans as part of their benefits packages.
These programs vary in their structure and the amounts offered. You will need to weigh up the benefits off specific packages against the other benefits offered by an employer to determine their end gain to you.
However, one of the tenants of squashing debt is that every little bit helps. Therefore, in most cases, these programs can be of significant assistance.
3. Take Advantage of Student Loan Repayment Tools
Repayment tools such as apps and calculators can come in very handy for those looking to manage student debt.
For example, the application ChangED automatically rounds up the cents to the dollar on any purchase you make, and then automatically puts this towards your debt. Once you reach a $100 balance from the rounded up cents, ChangED sends the amount to your student loan servicer.
Another popular, money-saving, debt-squashing tool is Evoshare. This browser extension automatically rewards you with cash back on your online purchases (providing they are with participating retailers). Savings can reach up to 30% of the value of your purchases and are sent directly to your connected student loan.
Evoshare is partnered with roughly 8,700 stores and restaurants and 1,300 online businesses, making it a practical tool to use for chipping away at your debt.
Another set of tools that can be invaluable for debt consolidation are debt calculators. These allow you to quickly and easily see the outlook on your loan at your current payment rates, and how you can improve this by making additional payments.
4. Consider Refinancing and Consolidation
One of the top recommendations for those seeking help with student debt is debt consolidation through refinancing.
Do you have multiple student debts? Or maybe you also have consumer debt, such as card debt, or a personal loan.
If so, you can choose to consolidate these into one debt that has one set of terms, one interest rate, and one payment per month. This can simplify your debt structure and make it a lot easier to keep on top of payments.
What’s more, in many cases you may be able to secure a better rate of interest by refinancing your student debt. For many people, as time passes they are able to build up better credit scores than they had in college. This means that they are likely to be eligible for better interest rates now than those available to them when they were younger.
This makes refinancing and consolidation a particularly good strategy for student debt resolution.
5. Get Crafty With Your Budget
While student debt resolutions can be of huge benefit, you also need to ensure that you are being smart with your budget.
By getting crafty with your spending, you may be able to rustle up a significant amount of cash each month to put towards your loan. Some economies might seem like sacrifices, but there are also a lot of areas where you might not even notice if you reduce spending.
A big one is canceling un-used subscriptions. A new study shows the average amount people spend on subscriptions is $237.33 a month. Chances are, there are a few services you are paying for (each and every month) that you never use.
Other painless ways to cut down on spending are to shop specials, switch to store brands, and plan your meals. If you want to get even more serious about your budget you can consider downsizing in other areas such as accommodation, your car, entertainment activities, gadget buying, expensive travel, etc.
Do You Need Student Loan Debt Help?
Getting smart with your budget and using student debt tools can go a long way towards squashing your debt. At the same time, you might be able to take advantage of lower available interest rates by restructuring and consolidating your debt.
If you’re looking for student loan debt help, you are in the ideal place to find consolidation options.
We offer an online tool that will instantly match you up with debt consolidation solutions that are tailored for your unique situation. All you need to do is enter your details and watch as the results come in. What’s more, this search will not place a hard inquiry into your credit score.
We take the grunt work out of finding the right consolidation solution and look forward to facilitating your path towards financial security. Feel free to contact us if you have any questions.