Top 5 tips to help you pay back your Student Loans
Graduating college, many of us are worried about starting our lives as adults in the real world. There are a number of new responsibilities to take on as fresh, college graduates such as living expenses, transportation expenses, the costs of food and water, and perhaps most frightening, the dreaded debt from student loans.
Managing student loans can be difficult, especially if you don’t fully understand the scope of what you’ve signed up for. Are you a college graduate? Are you having trouble paying back your student loans? Nervous and scared about the possibility of not being able to pay back your loans on time? Check out these top five tips that will help you effectively balance your budget and help you manage your student loans so you can sleep peacefully at night!
If you miss one payment
I know that the thought of missing a payment on your loans seems terrifying and like the end of the world, but it truly isn’t! Just like with any other payment that needs to be met on time, there are ways to catch up! Attorney Joshua Cohen, who specializes in student loans, claims “Missing a single [federal loan] payment isn’t the end of the world, and is easy to fix.” If you fall behind on a payment, you can either try and make it up or apply for forbearance or a deferment.
If you’ve fallen behind and can’t catch up
Sometimes we go through a rough patch in life. Perhaps you just lost your job and are having a hard time finding employment, or maybe you recently lost a loved one. When situations like this happen, it’s easy to fall behind on payments, but that doesn’t mean there’s no way out. First, apply for deferment or forbearance which can temporarily postpone your payments until you’re financially able to do so. Another option is to contact your servicer to switch your repayment plan. There is an option to have an income-driven repayment based on very little income, which can reduce your monthly payments to zero dollars.
When there’s no hope
If these options still aren’t enough, there is still hope. Nancy Mann Jackson writes, “Federal loans don’t default until payments are 270 days (or nine months) past due, and they offer several get-back-on-track plans, including loan rehabilitation and loan consolidation. In some cases, including permanent disability, federal loans can be forgiven or canceled.”
Cut back spending
This tip seems obvious, but I think its one we all (including myself) need to hear. We as college students, like to spend money on frivolous things until we embody our stereotype of the broke college kid. Whether we’re going out to bars with friends on the weekends or buying takeout for the third night in a row, these seemingly small purchases add up. So, stop eating out and cut ties with your favorite coffee place, because all this is doing is putting a hole in your wallet. Instead of spending your money on things you definitely do not need at the moment, put it in a savings account or literally a piggy bank to keep you from spending. This little bit of money here and there will help you in the long run when you’re paying off debt.
Sell your unused items
One of the greatest things about technology today is e-commerce. You can buy and sell just about anything online nowadays, which is awesome for people like me who have a bunch of useless junk lying around. If you have collectible toys from your childhood, clothes that you don’t wear, books collecting dust on your shelf, etc. consider selling them online! There are plenty of sites to sell on, with the most popular being eBay, Craigslist, Facebook Marketplace, and Poshmark. Not only will you be effectively downsizing, but you’ll also be making a quick buck!
Being a college graduate with no real grasp of the reality of the adult world can be a scary thing. When you’re drowning in debt, it can be even more frightening. However, these small steps can help you manage your loans and save money in the long run, giving you the financial freedom you deserve!