RANT: The Problem with student loans and how you can pay them off faster.
I”m getting on a soapbox. Ready?
STUDENT LOANS SUCK. DON’T GO INTO MAJOR DEBT FOR A COLLEGE DEGREE. NOT WORTH IT!
As Jay Gabler article, a 40 year old still paying off his debt says, "If you haven’t become one of us yet, think twice before you do". “One of us” being someone who takes out massive debt.
My friend Janice lives with her parents as she struggles to climb out of a 6-figure debt from a Boston school to get a degree in Theater. No one sat her down her Freshmen year and said:
“You know what, you’re not going to be able to do a lot with this Theater degree, why not get a different degree and work on Theater on the side and master it that way?"
The school doesn’t care, they already have your money. THANKS Higher Education!
Millennials get swindled into many worthless degrees and end up struggling to make the monthly payments. If you don’t know, you start paying off student loans right away (barring deferment) and usually it’ll be a good 10% of your monthly income. You can imagine it’s tough.
With $1.3 trillion in outstanding student loans, what are we supposed to do? You can’t sit around and hope the President forgives all loans or Congress changes something.
How to tackle and manage your Student Loan Debt:
1. Create an automatic payment machine: Student loan payments loan over our head each month. Just when you think you can go blow $300 on a new wardrobe, you remember you have to make your payment. Worst feeling ever. One method you can use is to do automatic saving.
Here’s what you do. Set up an automatic transfer of $60 a week to a savings account. You will automatically start “mentally” budgeting for that $60 each week. Then, at the end of the month, instead of having to scrape pennies together, you already have your payment ready with little stress.
Check out this article on automating: “Automate your bills.”
2. Defer as long as you can: This may not be the “fiscally responsible” thing as interest on your loans can add up. Somewhat ok news for that is it’s a tax deduction. The idea is you are going to make more money in a couple years than you do now.
Hint: How to defer. 1) You can request it. 2) If that’s denied, take some cheap, junior college courses. If, at least for federal, they think you are back in school, they will allow deferring. Spend $200 on a semester of a class and you’ll get a notice they are postponing payments. Yes, you are somewhat “kicking the can”, but it’ll allow you time to prep for this new added expense.
Check out this article on making more money at your job: “How to Make $1000 an hour…”
3. Refinance ASAP: If the debt is piling up quick, you might be better off refinancing and/or consolidating. Interest rates for loans go up and down so if you’re paying way above the market rate, you should reach out to lenders and get their thoughts on it. Typically, you won’t pay any origination fees, however, make sure you are getting a fixed rate. With the economic fluctuations in the past couple years, variable rates can be dangerous.
These are the Top Lenders for Student loans in 2015.
This stuff makes me mad. Friends being burdened with all this debt and as it turns out their degree can end up worthless. If you paid a consultant 6 figures, you’d probably get some profitable advice…..why aren’t young, naive freshmen being given world-class advice on this?
More and more millennials are working on the side to make some extra money and follow what they love. That may be where you will need to venture to make some extra money.
No worries, we will be giving these types of tips to make more money as we go.
Do you have a rant against student loans? Put your rant below!
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