Seven Steps to Quickly Pay Down Your College Debt
U.S. student loan debt totals $1.7 trillion. It is an average debt load of $39,351, according to EducationData.org.
Yet, simple tools can ease that burden and help graduates get out from under their debt.
- All payments during forbearance go to principal. Covid-19 forbearance on college debt has been extended through at least Sept 30.
- Make payments greater than the minimum payment. Simply adding $100 per month to your payment will shave roughly 3 three years and $3,000 in interest payments off the average loan (NerdWallet).
- Pay off high-rate loans first, then apply that payment to your next loan when the first loan is paid off.
- Pay off the smallest loan first. It may not be the most expensive, but there is a sense of satisfaction when you can ‘check the box’ on a loan.
- Attempt to refinance your loans at a lower rate.
- Set loans up for auto-payment, which can help you qualify for a lower rate, usually a ¼% lower.
- Be leery of extended plans. They come with lower monthly payments but will extend your repayment schedule and interest payments.
A blanket forgiveness of student loan debt is far from a given. Yet, various repayment methods will help graduates get a handle on what seems to be an insurmountable challenge.