8 Ways to Pay Down Student Loans- MSN Money

Published on February 2017 | Categories: Documents | Downloads: 25 | Comments: 0 | Views: 244
of 6
Download PDF   Embed   Report

Comments

Content

5/5/13

8 ways to pay down student loans- MSN Money

More

Outlook.com

Mobile

Bing

Rewards

Make MSN your homepage
Sign in Like 175k

MONEY
HOME NEWS NOW INVESTING PERSONAL FINANCE REAL ESTATE CAREERS AUTOS

Follow

saving & budgeting credit & debt loans

retirement insurance taxes your money

8 ways to pay down student loans
The average student loan debt for a 2011 graduate is expected to be $22,900, the most ever.
By Karen Datko Sep 15, 2011 7:10PM The burgeoning student loan debt in the U.S. has caused some to wonder if it's a crisis in waiting. Some think the crisis is already here. Student debt increased by at least 10% in each year of the first decade of this century, due in no small part to rising tuition costs, according to a Moody's analysis (.pdf file). The amount of Americans' student loan debt now exceeds the total owed on credit cards. ABOUT SMART SPENDING The average student loan debt for a 2011 graduate is expected to be $22,900, the most ever. And Moody's study suggests that those who entered college during the Great Recession and its lingering aftermath are increasingly likely to default. Those who do pay will have less money for other life pursuits, such as buying a home or starting a family. It's scary stuff for new grads. But here are a few suggestions: Figure out how much you owe and to whom. Now you can budget appropriately and explore whether loan consolidation make sense. (That budget should include enough savings to build an emergency fund and money set aside each pay period for retirement -- at least enough to qualify for your employer's 401k match. Hey, no one said life after college would be easy.) Continue to live like a student. This tip -- my personal favorite and one I used back in the day -- comes from Deliver Away Debt, the blog of a guy who's made a name for himself by chronicling his pizza deliveries. Unless you've been using your student loans to live like a king, you already know how to be a pauper. That frees up more money to pay off debt. Avoid other debt. You're in no position to buy a house or a new car. If you need wheels for work, use that good credit you've established by paying your student loans each month on time to qualify for a used-car loan at the bank or credit union -- if you don't have cash for a car. Get a second job (assuming you have a first one). Jeff Kosolaat Deliver Away Debt said he made up to $1,800 monthly delivering pizza for 22 hours every week. Pay the student loans off as fast as you can, particularly if you have a high interest rate. You will likely have an option of several payment plans. However, less time means less interest you'll owe on the amount you borrowed. Just make sure that any extra amount goes to the principal and that there is no penalty for paying off the loan early. Find every advantage. If you can get a lower interest rate by setting up automatic payments, do it. Some programs reward a track record of on-time payments. Will your employer help out? Some private employers will help you with loan payments, so ask. Working for the government and in some other public service jobs may qualify you for loan forgiveness. Inquire about hardship status if you truly can't pay. Getting the debt wiped out is extremely difficult, but you may be eligible for deferment or forbearance. "Financial irresponsibility is not a legitimate claim for hardship status," Deliver Away Debt warns. Post continues after video. Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter. LATEST BLOG POSTS

Feedback

The credit cards of summer
Some credit cards travel better than others. We take a look at ones that will save you the most in your summer travels. Frozen pizzas recalled FBI warns about 'sextortion' scams 21 terrible Mother's Day gifts 14 ways to make clothes last longer 5 best cheap coffee brands Do you have too many bank accounts?

VIDEO ON MSN MONEY
POPULAR NOW

TOP PICKS

NRA says it's fighting a 'culture war'
5/3/13 1:52

That's the Spirit: Local Crop Booze Booming
15 hrs ago 1:41

FACTBOX: Which global brands do consumers 5/3/13 2:02 buy most?

How to make clothes last longer
5/3/13 1:56

1 of 33

money.msn.com/saving-money-tips/post.aspx?post=a358eca2-c045-407b-af5a-3b65ea356f10

1/6

5/5/13

8 ways to pay down student loans- MSN Money
TOOLS

How much will my savings grow?
Play with the factors that affect the size of your stash.

How much should I save for college? Am I saving enough for retirement? How much car can I afford? More

Like

0

Send

DIY high voltage Thor's Hammer: Mjolnir at 80,000 volts
I wanted Thor's hammer (Mjolnir), but I wasn't going to accept any old boring plastic prop. I needed something with a little more POP. I worked with Staci Elaan to build this hammer that has a solid state tesla coil inside. When you push the button, 80,000 volts of electricity arc from the top. It will light up any floures... More NOW PLAYING BLOGS WE LIKE Bargaineering The Dough Roller Frugal Nation Get Rich Slowly Len Penzo dot Com Market Dispatches MUST-SEE ON MSN Money Talks News The Simple Dollar Smart Taxes Surviving and Thriving Top Stocks Wise Bread

Autos
Of course, the best way is to avoid over-borrowing in the first place. For instance: Limit your tenure in school. Rare is the student who can afford to dally, dragging out a four-year program into a fifth year or more. With careful planning and some high school advanced-placement classes under your belt, you can complete a four-year program in three years. (It wasn't fun, but I did it.) Attend a school that provides good financial aid. Rare is the student who pays the sticker price for tuition, but some schools are more willing to help out than others. (One reason I continue to donate to my alma mater each year is the percentage of the gift that goes to student aid.) Tap every resource. Lots of scholarships exist. Apply for the ones whose criteria you meet. And if Grandma or a well-off childless aunt wants to help out with expenses, let her. Use the student loan money for what it's intended. I know someone who borrowed to the max to fund an adventure living abroad after the overseas study program had ended. Last I heard, bill collectors were still hounding him. Why should you repay the loans, you might ask. Answer: You have to. Student loan debt can't be discharged in bankruptcy. One way or another, your creditors will get their due -- garnishing your paycheck, taking your tax refund or taking you to court. More on MSN Money: Student loans: A crisis in waiting? US News' top colleges for 2012 Will I be able to pay back my student loans? 6 reasons not to save for your kids' college How much should I be saving for college? Movies: 'Iron Man 3' film review Bing: NBA playoffs msnNOW: Pilots nap during flight Top cars of the Shanghai Motor Show

MORE FROM BING Cheapest grocery stores What's the cost of raising a child? Home improvements that waste your money Investment secrets from Warren Buffett Who are the biggest lottery winners? Best jobs for baby boomers

Tags: college

college costs

college tuition

debt

Karen Datko

student loans

< Back to Smart Spending

80 Comments
money.msn.com/saving-money-tips/post.aspx?post=a358eca2-c045-407b-af5a-3b65ea356f10 2/6

5/5/13
NEWEST OLDEST BEST WORST CONTROVERSIAL

8 ways to pay down student loans- MSN Money

YourVoteDoesNotCount

Sep 22, 2011 10:39AM

Umm, I would like to know what school these students are going to, to only be 25k in debt. I had to pay my way on my own and I am 115k in debt from school. My monthly payment is around 930 a month. If I consolidate, I pay more in interest rates and I pay longer. Instead of making payments for 10 years I would be making payments for 30. What's really sad is that Institutions in this country as well as the government allow foreigners to come here and go to school for free. Everyone from every country abroad is finding away to milk the money away from the American Taxpayer. Its time we stand up and stop paying taxes that allow everyone else to live a free life. 118 10 Replies (0)

Big McIrish

Sep 22, 2011 7:44AM

I don't know who Ms. Datko surveyed or got her research from but she is WAY off her mark. Loans are more like in the 100K mark when they graduate. Maybe she means $22,900 per year!!! 76 10 Replies (0)

Graduated Student

Sep 22, 2011 10:11AM

Some of these tips this article points out may be helpful but I disagree with most of it, if it works for you good, great, grand, wonderful. Most of us out there had to actually WORK while going to College, it wasn't all beer, pizza, and b!tches on the weekends for US. SOME of us actually had to WORK FULL TIME while going to school, so yeah maybe you can graduate in 3 years because you are taking 26+ credit hours when you don't have to work because you have Grandma to live off of or an Arby's-eat-our-sh!t-and-get-an-educatio​ n-grant. So SOME of us actually had to accrue other debt to SURVIVE. For SOME of us out there, College did NOT come easily and we had to retake a few classes, possibly because we were working 50+ HOURS a week at our JOB to pay for RENT, TUITION, BOOKS, etc. MANY of us graduated in one of the worst recessions in recent U.S. history. My point? I have student loans. I have other debt. I have a house payment. I have a car payment. I More 71 12 Replies (0)

sn10110

Sep 22, 2011 9:11AM

average debt $22,000 try $40,000.....4 year degree working 2-3 jobs to get by. My loans are the same as a house payment and utilities. Oh and they wont do anything to help I can consolidate because of the type of loan I cant reduce my payments.... I cant do anything so now im trying to raise a child on my own with 3 jobs and I am still just getting by. Maybe I should just go on welfare :) I can get everything paid.... money handed to me..... food...and then I can have some time to spend with my child instead of him sitting in a daycare all day while i try to get by. 4 year degree and I make 1 dollar more than minimum wage for every year in college and now i am 40,000 in debt. Somethings wrong with this picture! 58 7 Replies (0)

VDW117

Sep 22, 2011 3:25AM

These solutions do not work for me. I have deferred my student loans so many times because I cannot pay the full amount every month. Right now, that is that largest monthly bill I have after my rent. Unless I change careers or come into some kind of money, I will be paying my student loans off for the rest of my life. I do feel like it's beneficial to have an education, but it shouldn't cost so much! 54 6 Replies (0)

olechevyguy

Sep 22, 2011 7:08AM

You mentioned getting through school as quickly as possilbe. Here's another tactic. WORK your way through. My financing was with a credit union. I borrowed enough for a semester and then repayed that while I was going to school. It took me six years to get my BA, but at the end of it all, I only owed for my final semester which I paid off the following summer. Yes, it took longer to hit the job market, but I did it free and clear! 50 3 Replies (0)

Give me the facts

Sep 22, 2011 9:48AM

Student loan debt is a huge debate... and I feel for those who have large amounts, but I feel there are things people can do to put themselves in a better position to pay them off. I'd like to add a few

money.msn.com/saving-money-tips/post.aspx?post=a358eca2-c045-407b-af5a-3b65ea356f10

3/6

5/5/13

8 ways to pay down student loans- MSN Money
points to the article. Please note that my wife and I had a combined $80k-$90k in student loans when we graduated and will be free of Sallie Mae tomorrow after our final payment. 1. Get an internship/Co-Op: I'm in the engineering and manufacturing industry (probably one of the hardest hit industries by the economy) . I'm 25 and hold a full time job with a profitable company 90% of you have heard of. The reason? I landed a Co-Op during my college years that had me go to school one semester, work a semester, go to school a semester, work a semester, and so on. Not only was I making $12-$13 per hour, I got tuition assistance as well. I took online classes More 52 11 Replies (0)

Someone (rb3868)

Sep 22, 2011 11:01AM

The laws regarding student loans are a violation of the "equal protection" clause. Any other debt can be dealt with through bankruptcy. Even tax debts can be paid off for cents on the dollar. So you get all this debt, trying to better yourself and contribute more to society and then can't get a decent job because they've all been outsourced to China or India -- even "professional" careers. Someone else gets an equivalent amount of credit card debt - borrowing for vacations, concerts, extravagent meals. Someone else builds up $60k in unpaid taxes. The fool spending on the luxuries he/she can't afford can wipe it out. The IRS will settle the $60k for $6k. The student loans? too bad. You have a mortgage for the next 20 years, with nothing to show for it but a piece of paper 43 3 Replies (0)

j (dds2011) loans. She now gets a resident salary for the next 3 years of 45K/year.

Sep 16, 2011 8:38PM

My wife graduated medical school with 250 K in loans. I graduated dental school with 250K in

Before people start crying about the current price of healthcare, realize my wife and I have half a million in debt before we even started working. That's a lot of money we need to pay off...now you might have an idea why healthcare costs are skyrocketing. And by the way, these 8 ways/suggestions for paying down debt are completely worthless/common sense. 42 2 Replies (0)

Sweet Suzi How to PAY DOWN your STUDENT LOAN? Have you Mommy or Daddy be in Congress!! Then you do NOT have to PAY!!

Sep 22, 2011 4:54AM

47

9

Replies (0)

BCoronet

Sep 22, 2011 7:41AM

So what if you can't find employment? What if you can't live after the student loan sharks take 100% of your unemployment and this is after consolidation where they continue to compound high interest rates! The real story are the despicable private student loan companies who rape students. As a family of co-signers we all have offered to share the burden with the company if they would drop their eye-popping $1400 a month repayment schedule to a do-able amount. I was told to sell my house, to borrow money, to work as many jobs as I could get (in this recession, right. I'm lucky I have a first job) or to even cash out retirement funds to meet the $1400 monthly payment. After explaining that in order to keep my professional job I had taken a pay cut and had not had a raise in 4 years, they still would not relent. More 38 6 Replies (0)

Necessary Student

Sep 22, 2011 10:54AM

I graduated a year and a half ago with top honors as a paralegal. When I started attending college, there were many jobs in the field. Now, I have attorney friends that are taking paralegal jobs because they can't find anything else. I planned on continuing on in school but wanted to take a break and work for a year, pay down my loans, and get my life in order. I am a divorced, over 40 mother and it was difficult enough for me to go back to school in the first place. In order to postpone paying on student loans when I can't even feed my kids at this point in time, I was forced to continue on with my education, making a larger bill in the long run but avoiding starvation at the same time. I have moved in with my sister, drive an '89 van that is paid for, go to church clothing drives for my kids, and never spend anything without weighing all options as to whether we REALLY have to have

money.msn.com/saving-money-tips/post.aspx?post=a358eca2-c045-407b-af5a-3b65ea356f10

4/6

5/5/13
More 29 1 Replies (0)

8 ways to pay down student loans- MSN Money
it or not. As careful as I am, we are barely making it and I owe a couple family members some

ajd92980

Sep 16, 2011 8:45PM

okay, while all you guys are talking about interest and stuff, I'd like to ask what pizza joint this person worked at and made $1800 a month working 22 hours a week. That's $450 a week, and averaged out, over $20/hr. I worked at a pizza joint before I went back to school and never made close to that, working nearly 30 hours a week. People don't tip anyone much anymore. They feel the cost of the product includes a decent salary for the delivery person, when in most cases, that person is getting paid less than minimum wage, which is legal since it's a position in which tips can be accepted. Think about that next time you order out for delivery. 29 2 Replies (0)

Someone

Sep 22, 2011 10:02AM

I know a chiropractor who graduated and has been practicing since 1997. Her husband set her up in a state-of-art office which she refuses to make payments on to him. To my knowledge she has not paid a cent to her over $100,000 student loans. She says it is simple to ask and receive a deferment of payment. She drives and Escalade, purchasing home, buys all her children's clothes from the most expensive department store in town, children have every toy and bit of technology available, she wears the best including Farragamo (Italian) shoes, eats in the best restaurants often. Now just what is fair about people losing their homes, lives when she is allowed these privileges? I read a statistic once that doctors are the least likely to pay student loans and they make more money than God. Pay up! A deadbeat is a deadbeat regardless of title and arrogance! 37 11 Replies (0)

llolamay

Sep 22, 2011 10:48AM

I'm in student loan repayment hell right now. I paid for college myself. I spoke with many different financial advisors at schools to learn the best way to get myself through college. Everyone's advise was just take out loans. Didn't get enough from FSA, here's a private bank education loan. Don't worry about it you'll be fine paying it back after college. Now I'm $60,000 in debt and struggling to get by each month. I am unable to consolidate my private loans and only half of the money qualifies for income base repayment. I am almost 30 years old and don't see being able to buy a house, have a family, or pay for a wedding for a very long time. The only blessing I see is I found a job close to my field and I don't have any other debt. 25 0 Replies (0)

spoo58

Sep 16, 2011 6:58PM

I paid on my student loans like a mad man when others were telling me I was stupid for doing so because the interest is a "tax deduction". Long story short, I'm debt free while those others are in allot of financial pain. If being stupid leeds to financial stability; I'll be stupid any day. Oh yeah I got a degree that was marketable as well. 26 2 Replies (0)

Doc2011

Sep 16, 2011 9:40PM

The student loan balloon is full fledged! The more the government loans to students, the more colleges raise their tuition rates. Meanwhile, every other commercial is for some mail in college where you can get a worthless degree. When I see 3 new colleges pop up in a year in my city alone, it makes me think that they must be make some mega bucks (kind of like the mortgage companies and others involved made a ton of money). 25 1 Replies (0)

BluDragon78

Sep 22, 2011 11:44AM

I know the author of this article is not talking about students with a 4 year degree have an average debt of $22,900!!!! Where did she get THAT number???? More like $60,000, $80,000 and in some cases even over $100,000 in debt. That flub alone makes me realize she doesn't have a clue what she's talking about. I stopped reading after I read that amount. That is laughable! Oh and that loan forgiveness for working for the government or service job does not mean you won't have to pay. I am in school now and working full time in a government job. The loan forgiveness means that you have to be employed full time in a qualified governement or public service job. You have to pay on your loan for 10 years. No defaults, you can't be late, any of that. If you pay your loans for ten years straight without defaulting, without being late, without skipping payments, THEN you

money.msn.com/saving-money-tips/post.aspx?post=a358eca2-c045-407b-af5a-3b65ea356f10

5/6

5/5/13

8 ways to pay down student loans- MSN Money
will be forgiven the remainder of your loan. Which actually sounds pretty good IF you can keep from More 26 3 Replies (0)

pdxjew

Sep 23, 2011 2:41AM

You have got to be kidding me.. Get a second job and live like a student. We are having to do that already to survive.. How will one actually have any extra cash to pay student loans down when all of their income is needed to just survie? Another article by someone who is completely out of touch with the student loan crisis. 25 4 Replies (0)

MoneysavingMom

Sep 18, 2011 3:28PM

How about 100k in law school loans, at a time when lawyers are unemployed at a rate of 10:1? Private loans only offer around a 6 -month grace period of hardship- which you use up between the time period of graduating and sitting for Bar Exam. And your law school gets a huge cut of your private school loan, which you had to take out because the federal loan was only enough to cover your books and you didn't come from a rich family that could pay your bills for you. THAT is a CRISIS already in effect and new attorneys are hurting the worst. It is time to change bankruptcy laws to include student loan debt! There is something wrong when you can't afford to feed yourself because you have to pay $1500k/monthly for your loans and you are unemployed... 28 10 Replies (0)

RELATED ARTICLES Saving money: Advice on how to save money, video - Your Money ... Budgeting and savings: Tips and planner advice to save money - MSN ... Smart Spending- MSN Money DATA PROVIDERS Copyright © 2013 Microsoft. All rights reserved. Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges. Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Realtime quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information. Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd. 10 mobile apps for coupons and deals - - MSN Money 5 ways to trim your grocery bills - coupons & bargains - MSN Money 5 best thrift store deals - - MSN Money

MSN Privacy

Legal

Advertise

RSS

Site map

About our ads

Feedback

Help

© 2013 Microsoft

money.msn.com/saving-money-tips/post.aspx?post=a358eca2-c045-407b-af5a-3b65ea356f10

6/6

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close