A student loan can be a real lifesaver for persons needing financial aid, who might not otherwise be able to afford the cost of getting an education without getting a loan; but a student loan can be a nightmare to repay, especially if the recipient of the loan only used the loan for a few semesters but did not actually go on to finish his/her degree. Even if the recipient received a degree and is qualified to work, the difficulties of finding a job in the current economy still poses a major problem and student loans become huge burdens rather than an investment. Paying off a student loan can be an incredible burden that forces the recipient to scrimp and save to make the payments, even if he/she did finish a degree and does fine a job, not even bankruptcy will defer the payments; so here are a few options that are available to persons who want to once and for all be rid of their student loan debt.
Make Faithful Payments
The most obvious method of getting rid of student loan debt is to faithfully make the payment, paying more than is required whenever possible; this might not always be possible however and your student loan debt becomes due a few months after you are expected to receive your degree, whether you are employed or not, so if your payments are due and you are unable to pay them because of unemployment or some other problem, here are some other avenues you can try for getting rid of the debt.
Join the Peace Corps
A good way of eliminating or decreasing your debt is to join the Peace Corps, VISTA, or teaching in a designated low-income school for five years or more; teaching will pay you up to $5,000 working for the Peace Corps or VISTA will rid you of 15% of your loan for each year that you are in the program. You won’t earn a lot while working in these programs but at least you will have 15% less to pay on your loan with each year that passes.
Consolidate Your Loans
If you have more than one loan to repay, consolidating them is a good idea as this will mean you only have one loan to repay and the interest loan will usually be lower; the overall amount you will have to pay may increase however, so before making a decision to consolidate your student loans, carefully evaluate your current and prospective rates and terms to see if you will benefit or not.
As with consolidation, refinancing may mean that you pay more overall but refinancing may make the month-to-month payments easier to handle since you may have a longer time to pay off the loan and lower your monthly payments; again you will want to evaluate which option is most beneficial to you and bear in mind that refinancing may not work for you unless you have a good credit score, as you may not be able to refinance, or your rates won’t be as low if you have a bad credit score.
For more information, read Loan Guaranty and Consolidate Your Student Loans.
- 5 Money Saving Tips for College Students (fastswings.blogspot.com)
- Using Secured Credit Cards To Improve Bad Credit (debt-consolidation-2u.com)