Student loan debt in America is at an all-time high at more than $1.35 trillion.
A 2016 college graduate is projected to have $37,000 in student loan debt, according to Huffington Post. Student loan debt is increasing because government grants and support for postsecondary education have failed to keep pace with increases in college costs, Time reports. This has shifted much of the burden of paying for college from federal and state governments to families.
In order to avoid debt, educate yourself on options prior to applying for student loans said Jaimie Miller, Executive Director, Iowa Credit Union Foundation.
“Find out what the interest rate is on various loans prior to applying and know what your monthly payments will be ahead of time,” Miller said. “It’s also important to anticipate the job market when it comes to choosing your degree. Find out the average pay rate versus the cost of living and make sure to include the student loan payment cost. Educating yourself about your options is key to combatting student loan debt before it starts.”
If you already have student loan debt, Miller suggested calling the loan company and seeing if it will work with you to consolidate for a more affordable monthly payment.
You can get ahead of the game and learn about the true cost of college by renting or buying the film Broke, Busted and Disgusted. This film is a pro-education documentary film that discusses the true cost of a college degree. The mission is to help students graduate with less debt, by helping them (and their parents) understand the potential repercussions of student debt.
Tips to pay down student loan debt:
Refinance – Consolidating and refinancing your loans can help you pay off your loans faster. Credit unions typically offer lower interest rates on loans. To learn more about credit unions in your community visit: http://www.iowacreditunions.com/aspx/findacreditunion.aspx
Use a cash windfall – If you suddenly come across extra money from an inheritance or settlement, use part – if not all – of it to pay down your student loan debt.
Student loan forgiveness – Investigate job opportunities with companies offering student loan forgiveness. Certain jobs such as public service work or teaching may offer forgiveness for part or all of your student loans.
Pay more – Make more than the minimum payment each month, even if it’s only $10-$20. Anything extra will go directly towards the principal, which means less interest owed in the long run.