In 2017, around 20.4 million students were expected to attend American colleges and universities. According to The National Center of Education Statistics, this is an increase of 5.1 million since the year 2000, and the numbers are expected to increase steadily in the future. The average annual fees for an undergraduate degree, including board, room, tuition and other fees would come to $16,737 for public schools, $43,065 at private nonprofit schools, and $23,776 at private for-profit schools.
With this enrollment momentum likely to continue, it’s important for students to have a good idea of how they are going to pay off their student loans in order to avoid debt that will be harder to overcome the longer that interest is incurred.
Ways to Pay Off Student Debt
Here are three fast and foolproof ways to pay off student debt, without needing a degree in economics.
1. Plan Ahead
If you are about to become a student or you are currently studying, did you know that you can start paying off your loan before graduation? While those small payments each month may seem like a lot of money to give up (especially when you want to be going out with friends), in the long run, it could save you thousands of dollars in interest.
For example, if you had a loan of $10,000 with 7 percent interest during freshman year, paying $75 a month could save you $694 in interest by the time you graduate.
2. Tips for Post-Graduation
After graduation, some students have had success by doing things such as moving back home in order to save money that they would have spent on rent. Although this might be hard after living away from home, it can be a great way to save money that you can use to pay off your student debt.
The idea of having multiple jobs might not be an ideal situation, but many Americans have two or more jobs to pay off debt from student loans and their first home. In certain situations, it might be a short-term versus long-term decision. Would you rather work 60 hours a week for one year to pay off your debt, or 35 hours for 10 years or more to pay the interest?
Refinancing
Another option is to refinance your student loan — this is often the best strategy in terms of paying off your debt because it enables you to pay off your current debt and take a new loan with a lower interest rate. These come with options for fixed and variable rates with loan terms usually spanning between five and 20 years, so finding the best private student loan lenders should definitely be at the top of your to-do list.
Becoming a student and achieving the degree of your dreams should be a celebration. Unfortunately, debt is something that might put many people off the idea of higher education. If you plan ahead and have a good handle on your finances and the available options, you should be perfectly positioned to leave school with little debt and move into your first job.