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Britt Erica Tunick is an award winning financial journalist who has spent the past 17 years writing about virtually every aspect of finance. She has mastered the art of boiling down complicated financial topics for readers to understand. |
Got student debt? Here are a few things to consider when trying and pay your student debt down quicker. Things to Consider if You Have Student Debt By Britt Erica Tunick Students across the country have started celebrating college graduations, but it won’t be long before many of those celebrations are brought to an abrupt end by the fact that graduation means the need to begin paying off school loans. That’s because more than 70% of students who graduate from college have school loans totaling just over $37,000 on average, according to CNBC. And if that’s not bad enough, many students can expect to spend the next two decades or more paying off their loans. According to the National Association of Student Financial Aid Administrators, there are more than 44 million Americans who owe about $1.4 trillion in student debt. Of that outstanding debt, $229.6 billion is owed by 6.8 million borrowers between the ages of 40 and 49 years old. In some cases, people who have yet to pay off their own school loans are now looking into borrowing for the education of their children. If you are among this group, following are a few things to consider trying and pay your debt down quicker: If it has been several years since you took out student loans odds are good that you did so at a higher rate than the interest rates that are currently available, particularly as U.S. interest rates remain near historical lows. Refinancing federal student loans with fixed rate private loans or home equity lines is a good way to reduce the overall amount you need to pay back. And since lower interest rates mean lower monthly payments, if you are able to pay more than the minimum principal payment you owe each month, or make additional payments, you can pay down debt even quicker and further lower the overall amount you will ultimately repay. If your federal loans were taken out at any point since 2008 when interest rates were already historically low, refinancing probably won’t make sense. If, however, you are able to make additional payments you can knock off the amount of time it will take to pay off your loans, as well as the total amount of interest you will ultimately repay, as student loans do not incur penalty fees for being paid off early. If you are unable to make loan payments due to low income or unemployment, there is a chance that you may qualify for loan forgiveness or one of multiple repayment plans available for federal student loans. |
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