5 Quick Ways to Pay Off Student Debt
Very few are fortunate enough to be able to go to college purely on scholarships and grants. Most are forced to take out student loans to pay for their higher education. In fact, two-thirds of the graduating class of 2010 borrowed about $25,250 to attend college, according to the most recent data available from the Huffington Post. It’s important to point out that this figure doesn’t even include students who borrowed to attend for-profit colleges. While graduation may have you stressed about paying back your debt, there are some options you can consider if you find yourself in a financial rough patch.
Firstly, if you took out multiple loans, it might benefit you to consolidate them. Consolidation is really similar to refinancing a loan since it extends the length of the repayment period and typically lowers your monthly payments. You also are only required to pay one monthly payment, which makes management easier. So if you don’t snag a good-paying job straight out of school, your loan payments may still be “do-able.” Consolidating during your “grace period” typically locks-in an even lower interest rate. However, do note that since your repayment is extended, this usually means that you’ll end up repaying more over time.
Get You Employer to Pay It Off
If you do manage to get a “corporate” job, you might just be able to get your new employer to pay off your debt when negotiating your contract. Referred to as an “employment incentive contract” your employer will pay your loans as long as you commit to working for that company for “x” amount of years. Your employer gets to keep top-notch talent in the office and you are guaranteed not only stability, but you get your debt cleared off too. It’s really a win-win situation. If your boss isn’t too keen about giving you extra money up front, there are other ways your employer might be able to indirectly help pay back your loan, which leads us to our next tip
Use Income Tax Checks & Bonuses
Throughout your career, you’ll most likely get extra cash in some form or fashion. Whether your boss gives you a hiring/signing bonus, relocation bonus, a holiday bonus, year-end bonus, or performance bonus (you get the idea), your boss will hopefully do right by you. Instead of using that extra cash to go on a shopping spree, use it to pay back a good chunk of your loan. If you’re fortunate enough to get back a refund check when filing your taxes, (which you should if you count your loan interest as a deductible) use that money to pay back your loan.
Enroll in a Forgiveness Program
There are several career paths that already have loan forgiveness plans instilled. This means that if you work in an industry for a certain amount of years (each has its own terms and conditions) your employer will pay for a certain amount of your loan. For example, if you are a teacher and work in an “urban” area for about five years, the school district you work for will help pay off some of your student loans. Other industries that offer loan forgiveness programs are in the medical field, government, and social work to name a few. So make sure to do some research if whether loan forgiveness programs exist in your line of work.
Become a Volunteer
Lastly, you can become a volunteer for any one of the major volunteering agencies such as the PeaceCorps or the AmeriCorps. They too offer loan forgiveness and stipends to their volunteers after they meet certain terms and conditions. This is an excellent outlet for recent graduates who can’t find a job right away or need some more time trying to figure out what they want to do with the rest of their lives. You’ll also get the opportunity to travel the world and help people, which is always a plus.