Student Loan Debt: What You Can Do to Pay It Off Faster

Apr 19, 2018 | Borrowing and Credit

Student Loan Statistics

It’s no surprise that as the cost of higher education increases so does student loan debt. The average tuition cost of a four-year private university is $34,750. For a public university, in-state tuition on average costs $9,970 and out-of-state tuition will run you $25,620. On top of it all, tuition costs increase each year at an average rate of 2.4 percent for private universities and 3.2 percent for public. If these numbers aren’t staggering enough, here’s one more sobering statistic; there are more than 44 million student borrowers who owe $1.4 trillion in student loan debt.

Tips to Pay Off Student Loan Debt

Like all other debts that may loom over your head, it’s important to create a plan on how to pay them off in a timely manner. Debt should be treated like any other bill. Even though student loan debt, under certain circumstances, can be deferred (temporary postponement of payment on a loan during which interest is typically not accrued), you can’t escape it. Here a few simple tips to help you pay down your student loan debt:

  • Make an extra loan payment – If you can budget to make one or two extra payments a year, you’ll pay off the loan faster as well as pay less in interest over the term of the loan. Be sure to tell your lender that the extra payments should go toward the principal.
  • Use extra money toward loan payments – Use the money received from a tax return or bonus at work to pay down your loan with a lump sum payment.
  • Refinance the loan – If your current interest rate is on the high side, refinance the loan to lower your interest rate and monthly payment.
  • Pay more than the minimum – Paying down student loan debt is similar to paying off credit card debt, and if you only make the minimum payment each month, it will take you a long time to pay off the loan. If you can you put an extra $10 or more each month toward your payment, you’ll pay off the loan quicker.
  • Pay more than once per month – If possible, set up the repayment terms to pay multiple times per month as doing so decreases the interest. Be sure to check with your lender about any limits on payment frequency first.

Student Loan Debt Freedom

The benefits of receiving a college degree are numerous. However, having thousands of dollars of debt is a scary reality for many people. By creating a budget, following a few simple tips and staying focused on your goal, you can pay off those student loans in no time.

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