For the vast majority of American’s, debt is the price of admission to the American Dream. From a young age, we are sold the idea that financial stability in the future is not possible without an astronomical investment in your education today. College is thought to be the prerequisite for success in life. For that ray of hope, many American’s sign over responsibility to a form of debt that has astoundingly high interest rates and is unshakable, even in cases of extreme financial hardship or bankruptcy.
Student loan debt in the U.S. stands at a collective $1.5 trillion split between 44 million people, according to Forbes. That amount has doubled over the past decade and isn’t going anywhere but up. This leaves many students shackled to their debt for the foreseeable future.
Finding the Right Plan
Students must find a way to come to terms with their debt. It’s unavoidable. There are several repayment plan’s available that extend the amount of time you have to pay off your loan, but as anything, the longer it takes, the more interest you will accrue. For many, however, there is no alternative than accepting the plan with the smallest monthly payment. When wrestling with your debt, consider these options:
- Prioritize Loan Payments. It can be easy to be lulled into the belief that your loan payment will never go away, but your best bet is to prioritize your loan payments appropriately. Sacrificing for the next decade could save you thousands in interest, bringing you that much closer to the finish line.
- Refinance. Some students become eligible for loan refinancing if they achieve a good credit score. Going through this process could significantly lower your interest rate and save you considerable money over the course of your loan.
- Adjust your repayment plan. Perhaps you initially chose the standard 10-year repayment plan but you are unable to maintain the monthly payments. If it’s not possible, moving to an income-driver repayment plan may be a better option than missing payments. The benefit of an income-driven repayment plan is a lower monthly payment, but in exchange, you will accrue more interest expenses.
Having debt is normal and nothing at all to be ashamed of. Debt is something that needs management, however. Sometimes, it’s not possible to manage on your own. There are options available to help you regain control of your life. Help is always just a phone call away.