ORLANDO, Fla. – In the United States, there are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt. An average student in the class of 2016 owes around $37,000.
Jessica Sanchez brings you some ways to pay off your debt faster and help your wallet take less of a hit. How well did you save for college?
“How much I was going to have to pay, and everything my family had saved was going to be wiped out in less than a year,” Sydney Klabnik told Ivanhoe.
First, create a budget. The most common method is the 50-20-30 budget. Fifty percent should go to your needs, 20 percent should go toward debts and savings and the last 30 percent is discretionary spending or “wants.”
Financial guru Dave Ramsey believes the best way to pay off all your debts is the debt snowball method. List your debts in order of total payoff balances, focusing on paying off the smallest one first, while maintaining minimum payments on the others. Once the smallest is paid off, you apply that payment on top of your next one, and before you know it, you’re seeing huge progress.
Your second option is referred to as the avalanche method. Instead of the smallest balance, you prioritize your debts with the highest interest rates. Starting big and working your way down will cut your costs long-term and the bottom line is to just keep paying off those student loans, so your credit rating keeps getting better and better.
According to student aid website, there are at least five ways to get your student loan forgiven, including working in a public service job, teaching, firefighting and several other options.