5 Tips to Repay Student Debt Faster

College students take out student loans and accrue college debt mostly because they have to.  For a lot of students, the only way for them to afford a college education is to take on college graduate debt.  It really only leads to one thing in the long run and that is having to repay those student loans in some way, some shape somehow.

Many stories about the housing market crash and credit card debt have run rampant throughout the business and financial news, but you always have to remember that Federal Student Loans, will not be removed if you decide to quit paying them or you file for bankruptcy.

With the economy today, students are expected to take home a lower average graduating salary than in previous years, and on top of that, the market for finding a job is limited for new college graduates.

So now you’re asking, if I take on college debt, I have a lower chance of finding a job, if I do find a job, I will have a lower salary than what I expected, so how in the hell am I supposed to pay off my student loans with no money?

I’ll try to help as much as I can, but you also have to take the initiative to pay off the loans and do it wisely.

1.  Save First, Spend Second

I have covered many topics in terms of saving money with couponing, as well as using sources like Upromise, to help accrue savings while you are buying necessities.  But, those aren’t the only things you need to look at saving money on.  Cell phone plans should be one thing you identify as a key aspect.  Almost everyone has cell phones in this day and age, and there are so many plans and options that you can use.  But first identify what is a necessity, do you need unlimited minutes, or do you need to have the brand new iPhone or can you get the older model and have 1000 minutes instead?  Shop around, look for deals, and find out what plans and phones suit your needs.  Also, see if your employer reimburses phone expenditures if you have to use it for work related business.

Apply those same principles to things like car insurance, finding a new apartment, or even looking for a new car if you are fortunate enough to.  Just remember, always look for the savings by comparison shopping, and looking for specials first before buying.  Don’t be afraid to say no to a salesperson if the purchase is not in your best interest.

2.  Live Like a Student Again

Now you’re graduated, ready to go spend all that money you just made? Nope, think again.  Being frugal is a very difficult thing to do.  I have struggled back and forth between saving money, and buying something I have really wanted throughout the years.   The hardest part of being frugal, is knowing that you have a check coming in every week or couple weeks, and knowing that you could spend $xxx.xx amount of money soon.  But think twice before you go out and spend $50 on dinner at a nice restaurant with friends.  Most of the time you could have spent $20 and would have been happy about it.  If you took that additional $30 that you saved, and say you went out to dinner once a week, every week for the year, you could have saved $1,560 to put towards your college debt.  For me personally, that would have been 10% of my student loans right there that was spent on a few drinks and appetizers at dinner.

Being frugal isn’t an off and on thing, you have to make your life about living on less expenses.  Look at buying generic foods and toiletries.  Instead of buying Charmin Toilet Paper, but the generic Wal-Mart brand.  If you need new clothes, shop at places like TJ Maxx or Marshalls.  If you wanted to be even better about clothes, shop at GoodWill, there are tons of new and like new clothing that have been donated that you can take advantage of.

Every time you save on purchases, put it directly towards your next student loan payment, all of a sudden, instead of a $200 payment, you are making a $400 payment, it really can be just that simple.

3. Consolidate Now, Not Later

I will always recommend consolidating college student loans to one specific place, for one reason, they are easier to manage if they are all together.

But one huge benefit of consolidating before your grace period is over, is that most companies will give you a lower percentage on your interest rate!  Normally, if you do this, they will also continue to honor your grace period just as if you had not consolidated.

So where do you consolidate a loan?  If it hasn’t already started, you will be getting numerous offers from various companies sent directly to your house, a lot of the offers may be very similar, but read over each one, and make a keep pile and a throw away pile to keep it easy.

I’ll give you the company that I used to consolidate which is Sallie Mae.  I have used them since I graduated, I had an extremely easy time consolidating my loans, and working with them, so I do not have anything poor to say about them.  They also offer other plans through their partner Upromise, which I have discussed in great detail about the benefits of joining it for free.  Always research the companies that you consolidate with, I would strongly suggest sticking with a larger name company that has been in the student loan industry for a while and is not a new fish in a large sea.

4.  Graduation Money? Use it.

This is one of the most difficult things to say, because if you are given money, it is really, really hard to just give it up.  This tip was given by my college adviser, and now at this point I am truly glad that I took her advice.

For a lot of students when you graduate, you send out invitations to your graduation and many parents and friends of the family send you money for gifts.  Now here is the hard part, take all of the money, again read this slowly, ALL OF THE MONEY, and put it directly toward your student loans.  Whether it is $100 or $1,000, it is free money that was given to you, so take advantage of it and pay down your loans.

Taking the graduation money and paying college debt will give you a big head start on your payments and also may save you the first year if you are struggling to find a job.

5. Stay up-to-date on Student Loan Help

If you are in a position where you don’t have a job, don’t make enough money, or don’t know what to do, it’s time to seek help.  There are programs to help students pay loans, even if you don’t make enough money.  IBR or income based repayment is an option that you can look at.  Some consolidation companies do offer this program, as well as government loans.  Here is an article about IBR from the Department of Education, where it can give you some more information: Income Based Repayment.

If there is no way you can pay your loans, you can apply for deferment.  Deferment applies to the following situations: unemployment, economic hardship, enrollment in school, or even more where you can check out here on the Sallie Mae Website.

Now I know that I put on here 5 tips to pay them off faster, and this is a way to postpone, but you need to know what options you have at all times.  That means, read over all the information that the Federal Loan Program or the consolidation companies send you in terms of your loans.

I would also take a look at the Student Loan Borrower Assistance website, to keep up to date on new news that comes abreast with loan companies, both Federal and private companies.

Summary

Remember paying college graduate debt if you take on student loans is a necessity to obtain a college degree.  It’s not easy the first time you have to write a large check to the loan company to begin paying off your student loans, but in reality, you knew it was going to happen.  Don’t ignore, and don’t act like it doesn’t exist, instead, take charge of your loans, pay them off quickly, and enjoy the years of being debt free.

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