You've gone ahead and got your bachelors or masters degree. You feel proud of the accomplishment. But do you feel proud of the debt that you racked up?
Now that you're done with your education, the next step is a rude awakening of real life - you have to pay it off. With over $1.6 trillion dollars in student loan debt as of 2020 and an average of $32,000 per person, paying off your debt has never been more difficult.
In this guide we give you some tips on how to pay off your student loan debt faster.
In the meantime, use this handy student loan refinance calculator so you can get a handle of what you need to do.
If you don't make a plan, there is no way you can execute on anything. Using the calculator above, you need to find out what is the realistic monthly payment you can make. Once you find out the monthly payment you want to make so you can finish your loan in the number of years you desire, this is the first step to moving forward. Let us assume you want to pay $500 per month on your debt.
Let's face it, if you have a minimum wage job with your brand new degree - that's not going to cut it. You need to level up by making additional income to cover that $500 per month so it does not impact your budget. Think of another job you can do. Cut the time spent watching Netflix, Youtube or going out with friends. Make a plan and execute on it to bring up your income by at least $500 per month to pay for this loan.
Now is the time to make a detailed budget. See how you are spending money every cent. Include everything in your budget. Leave nothing out. Label the things you spend into essential or discretionary. How much do the discretionary items add up to? What percentage of your budget is essential?
It's time to cut the things that are not essential. Especially if they have a negative or effect on your life or don't contribute to your growth. Take out the big knife here and cut, cut cut the waste.
If your minimum payment is $100 per month, you have to pay a lot more than that for any hope to get rid of your student loan faster. If you can afford to pay $500, do it. Especially after steps #3 and #4.
Did you get a bonus, a raise, or some unexpected money? Then take that and apply to your student loan now. These lump sums will literally crush interest payments that you'll be making. Do not buy anything new, do not move to a larger home. Do not lend anyone money. Don't buy toys for christmas. Just pay down on your loan.
Firstly, If it actually passes, its going to probably not include you, or take a long time to pass congress.
And lastly -- because it's not going to happen. Someone has to pay for that $1.6 Trillion, and its gonna be you with additional taxes. Not to mention those people that took out loans and paid them off with discipline are gonna be real angry and vote the politicians out of office that propose those debt cancellation programs to be paid with tax increases or inflation.
Let's all live in the real world.
Ultimately, it's your responsibility.
No one forced you to go to college, or to take out huge college loans, or pick a degree that only pays $35,000 per year. That's all on your shoulders now.
So increase your income, cut your expenses and pay off the loan quickly.
Your future self will thank you for it!