Student loan debt in America has gotten out of hand. As of February 2020, forty-four million people collectively owe a record 1.6 trillion dollars in school loan debt (Forbes 2020). I myself have contributed over two-hundred thousand dollars to that number. It is a national issue we can not get a hold of. So what do we do?
Well, about eleven percent of the people just don't pay it. I, too, was once one of those people, then I realized I wanted to go back to school (and borrow more), buy a house, build a business, etc.……. You cannot really do all things if your student loan debt is not in "good standing." So I had to find different ways to work through my own issue of student loan indebtedness.
Student Loan Statistics:
Total Student Loan Debt: $1.56 Trillion
Total U.S Borrowers With Student Loan Debt: 44.7 Million
Average Student Loan Debt: $32,731
Average Student Loan Payment: $393
Student Loan Delinquency Or Default Rate: 10.8% (90+ days delinquent)
The reality is there are two issues; the ability to make monthly loan payments on time consistently and the thought of opening your statement every month knowing you have this debt. There is a process you have to go through mentality before deciding how to tackle the topic. Don't beat yourself up. At times, I know that degree was worth the debt, but with a little guidance, it will all come together.
Here are three suggested ways to tackle student loan debt TODAY…
1. Stay in School (Most School Loan Payments Will Move into Deferment Status)
Now, this probably sounds outrageous to suggest; I'm sure that's what your thinking, right? I know, there is no way the best way to pay little to no school debt is to accrue more. Guess what, if you think that you are right, it is outrageous. Stick with me here, though. I'd go more into the deal, but I'd lose you, so I will just go to my next suggestion.
2. Look into Student Loan Forgiveness Programs
Communicate with your student loan lender. Based on what you do and where you work, you may be able to receive loan forgiveness. One type of program is the Public Service Loan Forgiveness (PSLF) Program. Under this program, if you are employed by a government or not-for-profit organization, you'd make 120 qualifying monthly qualifying payments while working full-time for a qualifying employer. The importance here is knowing which loans qualify, which occupations qualify, and which organizations qualify. This is where you may want to work with a financial professional to maximize all opportunities.
3. School Loan Debt PayOFF Plan
This may be one of the harder of the three suggestions. Most of us with school loan debt, especially if we recently graduated, don't have the extra funds to put toward school loans to pay them early. However, suppose you prioritize your loans based on interest accrued, principal owed, and payment amount. In that case, you'd be surprised at how much you could knock off.
The moral of the story, school loan debt is not fun, it can be overwhelming, but mostly it can block your opportunity for financial growth. Do not put this on the back burning; speak with a financial professional as soon as possible and put a plan together that helps ease your mind. A long time ago, I made the mistake to just leave it alone, it came back heavy to bit me, and I had to work three times harder to get things back in order. Get control of your debt situation now!
References:
1. Freidman, Z (2020). Student Loan Debt Statistics In 2020: A Record $1.6 Trillion. Retrieved From www.forbes.com/sites/zackfriedman/2020/02/03/student-loan-debt-statistics
2. StudentAid.GOV (2020). Student Loan Forgiveness
Retrieved From https://studentaid.gov/manage-loans/forgiveness-cancellation