Managing student loans can be complex and time-consuming if you’re not properly informed. According to the Education Data Initiative, 43.2 million Americans owe an average of $39,351 on their student loans, and 42.9 million Americans owe an average of $37,105, thus totaling a whopping debt over $1.59 trillion.
While these are alarming statistics, there are ways you can better manage your student loans.
Let’s dig into some key ideas so that you can become as debt-free as possible, as soon as possible.
As claimed by usa.gov these are the key components to maintaining your student loan debt: it is critical for your future financial health to develop a plan for managing your loans. When creating a plan, you should review your loan terms and conditions, know the exact amount of money owed, think of feasible payment plans, and know where to make loan payments.
If you have multiple loans, it’s key when deciding which loans to pay down first; to pay down loans with the highest interest rates. As time continues to fly by, the debt that you originally owed will increase drastically. According to CNBC, the average student loan interest rates fall between 2.75% and 5.30%.
Many students push the thought of student loans away because other important things are going on in their lives. They may have concerns about paying off their loans, but right now they’re focused on graduating.
“As of right now I haven’t created a plan to pay my student loans back. My main focus right now is my degree,” Karen Moore, fourth-year biology pre-medicine major, said. “I fear not being able to pay my student loans back because as life continues there are more responsibilities that come about, making it harder for me to focus my finances in one area.”
Another key concept when managing student loan debt is to explore all of your options. There are many alternative routes that you can follow to ensure that your debt is paid off as quickly as possible while still being affordable. There are opportunities such as consolidation, graduated repayment, extended repayment, income-contingent repayment, pay as you earn, deferment payments, or loan forgiveness. These are all payment opportunities that you can benefit from, but keep in mind they each have their pros and cons. That’s why it’s so important for you to do your research about the options that best suit you.