Reports suggest that 60% of the college students are drowning in college debt as they took out too many student loans to finance their bachelor’s degrees. The College Board reports released in the last month of October, 2013 shows that the students have borrowed an average of $27,000 on educational loan debt. The students who pursue a master’s or a professional degree usually tens and thousands of dollars on their tab. In fact, student loan debt crisis is the next big disaster that is going to paralyze an entire generation. If only the graduates could think of some ways through which they could avoid the burden of student loan debt, they could have graduated into a better and brighter future. Repaying student loan debt is a huge responsibility as there is no other option of discharging the debts through bankruptcy. Here are some tips that you can follow in order to eliminate student loan debt and maintain a safe distance with the same.
1. Look for scholarships if you’re still in school: Are you still in school while you find yourself saddled with student loan debt? Well, scholarships may be there in your mind when you’re applying for your school but always remember that you keep looking out for them throughout college so that you can match your extracurricular and academic accomplishments. You can have a talk with the financial aid office of your school to inquire about funds that are specifically beneficial for your school. Applying might take some time but this is free money and therefore you should give your best efforts.
2. Get organized with your finances: Being a student and staying out of state, doesn’t give you the right to take all the wrong decisions about your finances. In order to tackle your student loan debt, the first step that you need to take is to organize your finances so that you don’t miss payments and make late payments. Use a calendar or a tracking tool in order to keep a tab on each and every dollar that you spend. Set up a different account for bill payment.
3. Follow a frugal budget: You can follow a frugal budget in order to eliminate all the worries of missing payments and incurring late fees and penalties. Unless you devise a frugal budget, you won’t be able to maintain a track on your pennies. You need to keep a close watch on your money so that you don’t make the mistake of spending more than what you earn. Always spend less than what you make so that you have enough to save.
4. Try the loan forgiveness options: If you want to eliminate your student loan debt without repaying them and without seeking professional debt help, you may try forgiving the student loan debt through different public service programs.You can certainly help yourself by forgiving a portion of your student loan debt but in lieu of that, you have to agree to work in high need areas for a fixed number of years (see requirements). These areas include the rural communities and schools and medical clinics and even low income families.
Therefore, when it comes to repaying your student loan debt, you have to take some watchful steps about managing your finances and keeping debts at bay. Follow the steps mentioned above and get help of the professional financial advisors in order to stay on the right track.
The Health Care Reconciliation bill of 2010 pretty much stated that there was too much of the government backing loans made to students via private lenders, as well as lending the government’s money to students for additional loans. To put a halt to it all, the government switched all of their loans, which were serviced through the Department of Education, to new loan servicing companies. Apparently, it wasn’t to any lender in particular, offering no rhyme or reason. This change came with no warning and no advice to lenders.
Responsible student loan borrowers would soon learn of this through alarming methods. Some of these methods were logging into their National Student Loan Data System and discovering their loan was now at a zero dollar balance. The calls would soon flood the Department of Education phone lines with concerns of high interest, assumed missed payments, and defaulted loans. Once explained what has happened, the concerns shifted to why notifications were not sent, who were these new lenders and if they had good lending practices.
Some borrowers experienced issues having their automatic payments set up properly. Others had their monthly payment amounts and schedules shifted. Many would think a lower payment would be better and more affordable. Some people may have taken this as a great new start. Others looked at it as a scam. The lower the payment meant more outstanding balance to have the interest accumulate on. This also extends the life of the loan to be paid off, in some cases from five to seven years or possibly more. Not knowing their loans were switched over and payments not going through means they were falling behind on their payments and any student loan is reported on the credit report.